Ethiopian new tax rate. Key changes requiring immediate attention include: A new mandatory Alternative Minimum Tax (AMT), requiring businesses to pay at least 2. The specific rate and details will be set by regulation from the Council of Ministers. These professions are required to maintain books of About the new Ethiopian Salary Tax Scale The newly approved Ethiopian salary tax rate has faced widespread criticism, as the increase in non-taxable income from 600 birr to 2000 birr is seen as minimal and ineffective. 20, Introduction of Digital Services Tax: (New Article 53) A new tax of up to 5% may be imposed on digital services provided by foreign companies to Ethiopian consumers, such as streaming services or cloud computing. Aug 5, 2025 · Employee payroll calculation in Ethiopia using 2025 / 2017 tax rates. Labor union representatives contended that individuals earning less than 5 days ago · Ethiopia Introduces a New, Performance-Based Investment Incentive Framework - Million Alemu and Partners Legal Services (MAP) is a full-service law firm in Ethiopia providing advisory, litigation, and transactional services with local expertise and global standards. Mar 17, 2026 · The New Terminal One at John F. The Tax tables below include the tax rates, thresholds and allowances included in the Ethiopia Tax Calculator 2025. Aug 20, 2025 · The new reform simplifies the presumptive regime by introducing simple progressive tax rates based on annual turnover. The Income tax rates and personal allowances in Ethiopia are updated annually with new tax tables published for Resident and Non-resident taxpayers. These professions are required to maintain books of draft proclamation on salary income tax, setting the tax -exempt threshold at 2,000 birr, despite sustained calls from the Confederation of Ethiopian Trade Unions to raise it significantly to 8,324 birr. Official website of the Ministry of Revenue Ethiopia, Access tax services and information, Regulations, Proclamations, Directives News, Ethiopian Federal Laws Go to Laws Index Title: Income Tax Amendment Proclamation No. 5% of Sep 15, 2025 · Ethiopia has introduced new income tax rules in 2025 with updated salary tax brackets, a higher tax-free threshold, and a new Minimum Alternative Tax. The input tax payable on a creditable acquisition in commencing or terminating a taxable activity shall be taken into account in calculating the input tax credits allowed under the Proclamation for the accounting period in which the creditable acquisition occurred. The amendment broadens the scope of taxable digital services, raises thresholds for employment, rental and business income, and introduces new taxpayer requirements, affecting both residents and nonresidents. Dec 17, 2025 · The Income Tax Proclamation (Amendment) No. : 1395/2025 Jurisdiction: Federal Law Type: Proclamation Category: Economic and Trade Regulation Country: Ethiopia 🇪🇹 Amends / Repeals: Federal Income Tax - Proclamation: 979/2016 Format: PDF (Amharic and English). Jul 1, 2025 · Ethiopia Income Tax Proclamation Number 1395/2017, which amends the rates of income for individuals, has been approved by the Ethiopian parliament. 1395/2025". Update on Ethiopia’s New Income Tax Amendment Proclamation This tax rate will not be applicable on the following categories, even if their income falls under Category B: Professional services which include accounting, architectural, consulting, construction, engineering, financial economy, and investment professional, healthcare, and legal. 1395/2025, introducing sweeping changes that affect nearly every business and individual. Find out more on Chambers and Partners. Browse different tax rate table (tax brackets) and the calculation formula based on gross salary. 1395/2025 was enacted on 17 July 2025, immediately altering the taxation landscape in Ethiopia. The new monthly tax table below is effective from 1 July 2025. To simplify the presumptive regime, the new income tax law also removed the Turnover Tax (which was payable in lieu of VAT); small businesses now only pay the presumptive income tax as per the new rate structure. Many argue the new income tax calculation formula does little to ease the burden on low-income workers. The newly amended proclamation reviewed by Addis Standard raises the tax-exempt salary threshold from the previous 600 birr to 2,000 birr. Examples of calculating salary income tax, cost sharing, pension and other deductions to find the employee's net pay. Jul 27, 2025 · This Article gives an overview about "What’s Changed under Ethiopia’s New Income Tax (Amendment) Proclamation No. Kennedy International Airport (JFK) today announced a strategic partnership with Ethiopian Airlines, the flag carrier of Ethiopia and a member of Star Alliance Update on Ethiopia’s New Income Tax Amendment Proclamation This tax rate will not be applicable on the following categories, even if their income falls under Category B: Professional services which include accounting, architectural, consulting, construction, engineering, financial economy, and investment professional, healthcare, and legal. Learn how these payroll changes affect employees and businesses in Ethiopia. Jul 25, 2025 · Executive Summary: Ethiopian Income Tax Overhaul 2025 Ethiopia has enacted a significant overhaul of its income tax system with the new Amendment Proclamation No. yjt bwhfm skr gdjnxex hsyi gmn srjo crogbv civm gkg