M-Pesa Ethiopia, the mobile money arm of Safaricom Ethiopia, has partnered with the Amhara National Regional State Revenue Bureau, enabling taxpayers in the Amhara Region of northern Ethiopia to settle obligations securely via their phones. Announced on March 21, the memorandum of understanding (MoU) allows over 450,000 individuals and businesses in the Amhara region to make tax payments through the platform, slashing the need for time-consuming visits to revenue offices plagued by manual processes.

This deal positions Amhara as the first regional tax authority in Ethiopia to integrate mobile money into its payment options. Tax administration in Ethiopia has long relied on paper-based systems and fragmented processes. "With this partnership, taxpayers in the Amhara Region will be able to make safe, fast, and convenient tax payments through M-Pesa from anywhere," said Mengesha Fentaw, head of the Amhara Regional Revenue Bureau. He highlighted how the initiative would ease administrative bottlenecks, bolster record-keeping, and drive revenue mobilization, urging other regions to follow suit in support of Ethiopia's Digital Ethiopia agenda.

BOOSTING MOBILE MONEY MOMENTUM

The MoU follows strong user growth for M-Pesa in Ethiopia. Safaricom Ethiopia's Q3 update for the period ending December 2025 revealed three-month active customers on the platform surging 258% year-on-year to 5.2 million. Transaction volumes nearly tripled to 364.3 million, while values more than doubled to ETB 20.37 billion ($129 million), following its integration with the national EthSwitch payments system in October 2025. Across Safaricom Ethiopia's broader operations, three-month active customers hit 12.2 million—a 72% increase—while service revenue climbed 54% to $74.7 million (KES 9.68 billion).

Getachew Mengiste, a representative of M-Pesa Ethiopia, said the agreement was the company's first with a government-funded institution, made possible by a new Ministry of Finance directive allowing financial institutions licensed by the National Bank of Ethiopia to work with public institutions. This tax collection venture builds on M-Pesa's established role in utility payments like water and electricity, as well as emerging uses such as video streaming and AI tools, amid intensifying rivalry with Ethio Telecom's telebirr.

ETHIOPIA'S DIGITAL TAX OVERHAUL

Ethiopia's tax system has historically depended on in-person services, with taxpayers making multiple office visits and facing manual processing. The arrangement aligns with Ethiopia's nationwide digital transformation agenda, according to TechAfrica News.

Mobile money services have gained ground in Ethiopia, particularly since Safaricom Ethiopia entered the market in 2022. The launch followed the 2021 award of Ethiopia's first private telecom licence to the Safaricom-led consortium, which ended Ethio Telecom's monopoly; Safaricom launched M-Pesa in Kenya in 2007.

REVENUE TARGETS

Mengesha said the bureau collected 67 billion birr in the 2024/25 fiscal year and plans to collect 100.37 billion birr in 2025/26, about 60% of which had already been collected. He said making tax payments easier, faster and more efficient through digital systems would help the region meet its revenue targets.

Getachew said the new directive creates an important opportunity for institutions such as M-Pesa to expand their services into the government sector. M-Pesa Ethiopia operates as part of Safaricom Ethiopia but is a separate legal entity licensed by the National Bank of Ethiopia.

COMPETITION WITH ETHIO TELECOM

The agreement comes as competition grows in Ethiopia's telecom and digital finance sectors. For years, state-owned Ethio Telecom dominated services linked to government institutions, Ethio Negari reported.

The partnership is aimed at improving access to digital financial services while streamlining tax collection processes, according to TechAfrica News.