The Ministry of Revenue has announced stricter enforcement measures targeting manufacturers of excise-taxed goods who fail to meet their legal obligations. A new Operational and Implementation Manual has been introduced to guide administrative actions against non-compliant enterprises, including temporary closures and license suspensions.
According to the Ministry, the new directive will be implemented under the authority of Excise Tax Proclamation No. 1186/2012 and Tax Administration Proclamation No. 983/2008. It empowers officials to take decisive actions against manufacturers evading excise tax payments, particularly those producing luxury goods, socially harmful products, and high-demand items ― categories that traditionally contribute significantly to government revenue.
The manual outlines a progressive enforcement process designed to ensure fairness before sanctions are imposed. Non-compliant companies will receive up to three written warnings to rectify their violations. If corrective action is not taken within seven days after the final notice, the Ministry will have the authority to temporarily seal the production site for 14 days. During this period, operations will remain halted.
If a manufacturer continues to ignore compliance requirements even after temporary closure, the Ministry may escalate penalties by suspending the business license. The directive also states that manufacturers giving false information, mismanaging accounting records, or using equipment unsuitable for tax monitoring will face stricter sanctions, including possible license revocation.
Taxpayers affected by suspension orders may lodge a written appeal to the Tax Complaint Investigation Department within 14 days. The department will then review the complaint and decide whether to lift the suspension, adjust penalties, or permanently revoke the license.
Abere Asfaw, Director of the Legal Services Directorate at the Ministry, emphasized that any order to seal a factory must come directly from the Minister, the Director-General, or an officially delegated authority. “This ensures that every action is both transparent and lawful,” he said.
The manual also requires manufacturers to notify the Ministry of any change in ownership, factory address, or production machinery within seven days, strengthening oversight of operational shifts that could affect tax compliance.
Ministry officials explained that excise taxes remain a major source of state revenue, as the consumption of these products generally remains high even when prices rise. The directive is intended to safeguard public income from losses due to underreporting or evasion while rewarding businesses that comply with the law.
“Empowering branch offices to take swift, lawful action against evasion creates a fair market environment for compliant taxpayers,” the Ministry said in a statement.
The directive took immediate effect upon issuance. The Ministry of Revenue urged all producers of excise-taxable goods to review their documentation, accounting systems, and payment records to avoid penalties.
Officials reiterated that the measure forms part of an ongoing national effort to modernize tax administration and ensure consistent application of the law across all sectors.
Excise taxes, typically applied to items such as alcoholic beverages, tobacco, soft drinks, and luxury goods, have become an increasingly important source of revenue as Ethiopia’s fiscal system modernizes to meet growing developmental needs.
