The Ethiopian Ministry of Finance has issued crucial Explanatory Notes on the new Income Tax Amendment Proclamation No. 1395/2025, providing immediate guidance to businesses and taxpayers ahead of formal regulations. The primary focus of the notes is the new Alternative Minimum Tax (AMT), set at 2.5% of annual turnover, which ensures all businesses contribute a baseline tax even if their reported profit is low. The notes also address other major changes to ensure a smooth transition.

Our Ethiopia Team gives a practical overview of the new legislation in the newsletter available here.