Ethiopian lawmakers ratify amendments to income tax and electoral proclamations

Addis Ababa, July 17, 2025 (FMC) — Ethiopia’s House of People’s Representatives, acting as the country’s legislative authority, ratified two critical proclamation amendments during its second emergency session convened today.

These reforms mark significant progress in modernizing the nation’s fiscal framework and strengthening its electoral governance, it has been learned.

The parliament endorsed the amendment to the Federal Government Income Tax Proclamation, designed to establish a contemporary tax system aligned with the complexities of the digital economy.

Desalegn Wedaje, Chairperson of the Standing Committee on Planning, Budget, and Finance Affairs, underscored that the revision aims to broaden the tax base, enhance revenue mobilization, and promote tax equity by increasing the tax-exempt threshold for low-income earners.

He highlighted that the overhaul will simplify tax compliance and contribute to economic expansion.

Despite some MPs voicing concerns regarding the impact of the amendments on government employees’ livelihoods, the Chairperson affirmed that the revision process incorporated extensive consultations with relevant stakeholders.

Minister of State for Finance, Eyob Tekalegn, emphasized that the reform was developed after rigorous deliberations and benchmarking international best practices.

He also noted ongoing initiatives to improve government employees’ welfare, including a housing study.

Hence, the Income Tax Amendment Proclamation was ratified with a majority vote, five against and twelve abstentions.

Furthermore, the House deliberated and approved the draft proclamation amending the Ethiopian Election, Political Parties Registration, and Electoral Ethics Proclamation No. 1162/2019.

Presented by Mr. Ewnetu Alene, Chairperson of the Standing Committee on Democracy Affairs, the amendment seeks to address deficiencies in the existing legal framework, enhance the integrity of the electoral process, and promote inclusive political participation.

The amendment integrates international standards and leverages technology to ensure an efficient and transparent election process.

It broadens opportunities for women, youth, and persons with disabilities, and reforms grievance mechanisms by centralizing complaint resolution at the regional level for improved efficacy.

The bill also revises political party registration criteria and contribution rates, affording parties greater operational flexibility. This legislative amendment, codified as Proclamation No. 1394/2025, passed with a majority vote, including two against and four abstentions.

Members of the parliament expressed confidence that these reforms will bolster Ethiopia’s democratic institutions and facilitate sustainable socio-economic development.