By Kaleegziyabher Gossaye.
Legal update on The licensing and supervision of banking business reserve requirements (9th replacement) directive number SBB/97/2025
Legal Updates
Risk Based Capital Adequacy Requirements for Banks-Directive No. SBB/95/2025
By Kaleegziyabher Gossaye.
The directive is organized into six parts. The first part outlines the general provisions of the directive. The second part deals with definition of capital. The third part discusses the capital requirements for credit risk. The forth and the fifth part extend to the capital requirements of market risks and operational risks. The last part, but not the least, is dedicated to miscellaneous provisions.
Ethiopia’s Amended Income Tax Proclamation: Implications for Revenue, Professionals, & Investors
The goals of the amendment are typically outlined in the preamble of the proclamation. Therefore, the objectives mentioned in the preamble include: improving revenue collection through adjustments to the rates applied to certain incomes; expanding the tax base; creating an efficient system of tax incentives; and curbing tax avoidance strategies, which encompass restrictions on cash payments.
Tax Audits in Crisis: Can Ethiopia’s New Directive Restore Trust in the System?
Ethiopia has introduced new tax audits, conducting procedures, and the Assessment Directive No. 1063/2025, marking a significant development in its tax history. Tax audits represent a major challenge within the Ethiopian tax system; the implementation of tax audits contradicts the voluntary compliance expected from taxpayers under the self-declaration tax policy. During these audits, tax auditors often seek additional taxes without a legal foundation, aiming to meet monthly revenue collection targets. This trend significantly harms taxpayers, leading to non-compliance with tax laws and fostering illegal practices.
The National Bank of Ethiopia issued new directives on June 25, 2025, finalizing the opening of the country’s financial sector to foreign players
Directive No. SBB/94/2025 provides a structured regulatory framework for banking operations in Ethiopia. The directive outlines the procedures for licensing and renewing banking businesses and representative offices. Adhering to these guidelines is crucial for maintaining the stability and integrity of the banking sector in Ethiopia.
Regulating Ethiopia’s Shift to Electric Vehicles: A Legal and Institutional Framework
Explore Ethiopia’s transition to electric vehicles with an in-depth look at the legal and institutional framework shaping the shift. Learn about policies, regulations, and challenges in EV adoption.
Significant Adjustments in Administrative Penalty Waivers Under the New Tax Administration Directive
The Ethiopian tax administration has experienced considerable changes with the implementation of Directive Number 889/2025, which supersedes the previous Directive Number 137/2010. This directive brings important modifications in the categorization and waiver of tax administration penalties.
Dispute over Taxing Undistributed Profit in the Context of Tax Treaties
By Arba Beyene Highlight on Background of Taxing Undistributed Profit. Taxing undistributed profit of companies, more numerously PLCs in Ethiopia, has for a long time been the reason for complaints and proceedings within the tax dispute resolution system. In 2013 the...
Navigating the Maze: Fair Market Value Issues in Ethiopian Tax Law
By Ketema Adane The Importance and Challenges of Fair Market Value: The issue of "Fair Market Value" (FMV) plays a central role in Ethiopian tax law, impacting various aspects like asset costs, sale considerations, and in-kind benefits. It ultimately affects taxes and...
Ethiopia Implements Revised Excise Tax Rates for Beer, Plastic Bags, and Tobacco
By Ketema Adane Excise Taxes: A Dual Role Excise taxes serve a twofold purpose: generating revenue for the government and influencing consumer behavior. They provide a reliable source of income by taxing goods with consistent demand. Additionally, they discourage...
Ethiopia Flips the Script from Banning Crypto to Launching CBDC
By Ketema Adane Ethiopia Enters the Digital Age: From Crypto Ban to CBDC Launch Introduction While Ethiopia's National Bank of Ethiopia (NBE) establishment proclamation (No. 591/2008) designates Birr as the sole legal tender, a significant shift is underway. On June...
Clock Rewind: Ethiopian Tax Amended Assessment Time Limit Controversy Heats Up
By Ketema Adane Bargicho Ethiopian tax policy emphasizes voluntary compliance through self-assessment. This means taxpayers are periodically obligated to calculate and pay their own tax liability according to relevant tax laws. If a taxpayer misses the deadline for...
Punishing the Victim? The Case of Not Allowing Deduction and Return of input tax for Alleged Fraudulent Invoices
By Arba Beyene Introduction Use of fake invoices created problems like brand falsification, money laundering, terrorist financing and claiming input tax return from tax payers’ money. But sometimes it may also put genuine tax payers in a situation where the input tax...