Ethiopia’s Council of Ministers Advances New Legal Frameworks for State Institutions, Data Sovereignty, Defence and Economy

Addis Ababa, September 28, 2026 (FMC) — Ethiopia’s Council of Ministers has advanced a broad package of legislative and regulatory measures aimed at reorganizing federal executive institutions, strengthening national data governance and sovereignty, modernizing the defence legal framework, supporting energy-sector reform and refining tax administration.

The decisions were adopted during the Council’s 59th regular meeting held today, with several draft proclamations approved for submission to the House of Peoples’ Representatives and amendments to key tax regulations endorsed for implementation.

The Council first deliberated on a draft proclamation to determine the organization, powers and functions of federal executive organs. The draft was prepared following the 2026 national election to establish the federal executive structure for the new five-year term, in accordance with Article 56 of the Constitution of the Federal Democratic Republic of Ethiopia.

Following extensive deliberation and incorporation of inputs, the Council unanimously decided to submit the draft proclamation to the House of Peoples’ Representatives.

A major item on the Council’s agenda was the draft National Data Management Proclamation, reflecting the growing strategic importance of data to Ethiopia’s digital transformation.

The proposed legislation is designed to strengthen data security and sovereignty, facilitate data sharing, interoperability and reuse, and support the modernization of government services. It also seeks to strengthen artificial intelligence research and innovation, accelerate the growth of innovation and the digital economy, and establish a data-driven system of economic development.

After extensive deliberation and incorporation of inputs, the Council unanimously approved the draft for submission to the House of Peoples’ Representatives.

The Council also considered a draft proclamation for the ratification of a 145.8 million Special Drawing Rights (SDR) loan agreement signed with the International Development Association (IDA) to finance the first phase of the Energy Sector Reform, Investment and Modernization Project.

After confirming that the agreement is consistent with Ethiopia’s national borrowing policy, the Council unanimously decided to submit the draft proclamation to the House of Peoples’ Representatives.

On the fiscal front, the Council approved amendments to the Federal Income Tax Regulation. The revision is intended to enhance transparency and administrative efficiency in federal income-tax administration and align the regulation with the amended Federal Income Tax Proclamation No. 979/2008.

Following deliberation and incorporation of inputs, the Council unanimously decided that the amended regulation would enter into force upon its publication in the Federal Negarit Gazette.

The Council also endorsed amendments to the Federal Value Added Tax Regulation.

The amendment seeks, among other things, to enable taxpayers who previously collected turnover tax on professional and other supplies to register for VAT following the abolition of turnover tax and collect the applicable VAT.

It also provides for the exemption of certain supplies from VAT where the tax burden has placed pressure on essential goods and services provided to the public and affected the competitiveness of domestic industries.

The amended regulation will take effect upon publication in the Federal Negarit Gazette, following the Council’s unanimous decision.

The Council’s final agenda item was a draft amendment to the Ethiopian National Defence Force Proclamation.

The amendment was presented on the basis of the need to revise the Ethiopian National Defence Force Proclamation No. 1286/2015 so that the institution can carry out its national missions in accordance with the law and the provisions of Article 87 of the Constitution.

Following extensive deliberation and incorporation of inputs, the Council unanimously decided to submit the draft amendment to the House of Peoples’ Representatives.

Taken together, the decisions address several dimensions of Ethiopia’s new five-year federal governance cycle—from the institutional architecture of the executive and the legal mandate of the defence force to data sovereignty, digital transformation, energy-sector modernization and tax administration—placing legislative and regulatory reform at the center of the country’s next phase of state and economic development.