- Ethiopia has changed its VAT system to include more businesses and professionals.
- The Ministry of Finance issued Directive No. 1104/2025 to improve compliance and expand the tax base.
- All Category A taxpayers and businesses maintaining books must register for VAT.
- Taxpayers with transactions over 2 million birr annually must register.
- Professional service providers must register even if their turnover is below 2 million birr, unless classified as Category B.
- Existing taxpayers meeting new criteria have 30 days to register and start collecting VAT.
- Finance Minister Ahmed Shide signed the directive on September 2, 2025.
- The directive is effective once published on the Ministry of Finance’s website and registered with the Ministry of Justice.
- Analysts believe the changes will increase tax compliance but may challenge smaller firms.
Source: kenyanwallstreet.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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