Supreme Court blocks VAT drive on lawyers

Kiswahili

Ethiopia's Supreme Court has blocked a Ministry of Finance directive requiring all lawyers to register for value-added tax, regardless of income. The move reverses longstanding exemptions based on earnings thresholds. This decision has sparked debate on taxation's role in professional services.

A directive from Ethiopia's Ministry of Finance sought to mandate VAT registration for all legal professionals, irrespective of their income levels. This policy overturned established exemptions tied to earnings, prompting a significant legal challenge. The Supreme Court has now intervened, blocking the enforcement and placing the ministry in a defensive position.

Reported by Nahom Ayele for Fortune on January 31, 2026, this high-stakes confrontation highlights tensions in tax policy for professional services. The reversal of income-based exemptions has fueled discussions on the balance between revenue generation and professional autonomy. While the ministry aimed to broaden the tax base, the court's decision underscores longstanding protections for lawyers. This ruling could influence similar policies in other sectors, though details on broader implications remain limited.

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