Ethiopia's Tax Reform
The Revenue Constraint, the New Legal Framework, and What the Collection Surge Really Means
Executive summary
What this brief covers.
Ethiopia collects roughly half of its estimated tax potential, with a tax-to-GDP ratio of 7.5% against a sub-Saharan African median of 13.2%. This brief examines the new VAT and income-tax framework, the minimum alternative tax, administrative reform, and the extent to which recent nominal collection growth reflects devaluation rather than deeper fiscal capacity.
Ministry of Finance; Ministry of Revenue; IMF; Income Tax Proclamation 1395/2025; VAT Proclamation 1341/2024
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Suggested citation
Tamene, Edosa. “Ethiopia's Tax Reform.” InfoPlate Media and Consulting, June 23, 2026.
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