To combat tax evasion and ensure a baseline contribution, the 2025 amendment introduced a on annual turnover. This applies if a taxpayer's declared business income tax falls below this 2.5% threshold. Notably, this tax can be credited against future liabilities for up to five years. Strategic Implications for Compliance
The Ethiopian tax landscape has recently undergone a seismic shift with the enactment of the , which significantly revises the foundational Federal Income Tax Proclamation No. 979/2016 . This legislative evolution reflects Ethiopia's broader strategy to modernize revenue collection, broaden the tax base, and capture the growing digital economy. Core Amendments to Domestic Withholding Rates withholding tax proclamation in ethiopia pdf best
Withholding tax is a type of tax that is deducted from an individual's or business's income by the payer and remitted to the tax authority. In Ethiopia, withholding tax is governed by the Withholding Tax Proclamation No. 608/2008 and the Income Tax Proclamation No. 282/2002. To combat tax evasion and ensure a baseline
The 2025 amendment introduced critical changes to withholding tax (WHT) rates and thresholds for domestic transactions, effective as of . These adjustments aim to streamline compliance and increase immediate government cash flow. broaden the tax base