An Assessment of the Direct Tax Regime in Ethiopia

This paper reviews the personal income tax, business income taxes, and property tax in Ethiopia using the framework developed by UNECA (2021) and in light of peer countries' and global best practices. Based on identified gaps in the review, we propose changes to the tax law and sketch their associated revenue gains and losses. The study has assessed the prevailing direct tax system in Ethiopia and moreover, identified opportunities and challenges that the system is currently facing to maximize its revenue collection potential.