Ethiopia Hardens Tax Enforcement: Revised Penalties, Expanded Offences, and New Statutory Defenses

In Part One of this series, we examined the conciliation regime introduced by Proclamation No. 1434/2026. In Part Two, we examined the reworked limitation periods, the new statutory code on revision of assessments, the tightened rules on new evidence, and the conditional tax clearance certificate. In this Part Three, we turn to the enforcement architecture of the amendment. The changes examined below concern the penalties imposed for non-compliance, the expansion of criminal offences, the recalibration of rules governing freezing orders and seizure, the treatment of officers of bodies, and the introduction of express statutory defenses that did not previously exist. Taken together, these changes signal a shift toward stricter enforcement, but they also introduce a measure of procedural discipline and, in one important respect, a statutory safe harbor for corporate officers who can demonstrate the existence of adequate internal controls. Please read the full details in the attachment.