The Ethiopian Parliament approved the Asset Recovery Proclamation No. 1364/2025 on January 9, 2025, and it entered into force upon its publication in the Negarit Gazeta on May 2, 2025. This legislation was introduced to fill a long-standing legal gap in addressing the recovery of assets obtained through unlawful means or whose origins cannot be justified. Before its enactment, the Ethiopian legal framework lacked comprehensive provisions for civil-based asset recovery and the tracing of illicit wealth, making it difficult to address unexplained accumulation of property and financial assets. The proclamation is designed to combat corruption, economic crimes, and illicit financial flows, while strengthening Ethiopia’s economic integrity, particularly in tax administration, foreign exchange management, and investor confidence.

After almost a decade, the Ethiopian Parliament has enacted the new Income Tax Proclamation No. 1395/2025, repealing most provisions of Proclamation No. 979/2016. This reform introduces key changes such as restructuring tax categories, introducing a Minimum Alternative Tax (MAT), revising tax rates, adopting aggregate income taxation, and removing turnover tax. It also updates the non-residency threshold, restriction on payment method, introduces advance tax payments, exempts LLPs and Collective Investment Scheme (CIS) from corporate income tax, and incorporates provisions addressing digital developments. This legal update summarizes these and other major changes under the new income tax proclamation.