Revenue Concentration Persists as Ethiopia Pursues Higher Tax Targets

Ethiopia’s tax revenue remains heavily concentrated among a relatively small group of large taxpayers, underscoring the challenge the government faces as it seeks to sharply increase domestic revenue in the 2026/27 fiscal year.

New figures released by the Ministry of Revenue’s Large Taxpayers Branch Office show that the office collected ETB 522.67 billion from 746 registered taxpayers during the 2025/26 fiscal year. However, just 29 percent of those taxpayers generated 80 percent of total collections, while the remaining 71 percent contributed only 20 percent.

The data reveal a tax structure that continues to rely heavily on state-owned enterprises and a limited number of large corporations despite the country’s expanding private sector.

According to the presentation, 31 state-owned enterprises—representing only 4 percent of registered taxpayers—paid ETB 217.87 billion, accounting for 42 percent of total revenue collected by the branch.

Foreign-invested companies also remained major contributors. 127 companies, or 17 percent of the taxpayer base, generated ETB 102.24 billion, equivalent to 20 percent of total collections.

Meanwhile, 50 banks and insurance companies contributed ETB 65.37 billion, representing 12 percent of revenue.

By comparison, the office’s 532 domestically owned private companies, which account for more than seven out of every ten registered taxpayers, generated ETB 104.60 billion—the same share of revenue as foreign-invested companies despite being more than four times as numerous.

Revenue Breakdown by Taxpayer Category (FY2025/26)

Taxpayer Category	Taxpayers	Share of Taxpayer Base	Revenue (ETB bn)	Share of Revenue
State-owned enterprises	31	4%	217.87	42%
Foreign-invested companies	127	17%	102.24	20%
Banks & insurance companies	50	7%	65.37	12%
Domestic private companies	532	71%	104.60	20%
Total	746	100%	522.67	100%

The concentration becomes even more apparent among the country’s largest taxpayers. The top ten taxpayers alone contributed ETB 254.44 billion, accounting for 48.71 percent of the Large Taxpayers Branch Office’s total collections.

Ethio Telecom ranked as Ethiopia’s largest taxpayer after paying ETB 65.84 billion, followed by the Commercial Bank of Ethiopia with ETB 36.87 billion and Ethiopian Airlines Group with ETB 30.87 billion.

The remaining leading contributors included Heineken Breweries Share Company (ETB 26.10 billion), Ethiopian Shipping and Logistics Services Enterprise (ETB 22.20 billion), Ethiopian Electric Power (ETB 18.31 billion), and Awash Bank Share Company (ETB 15.77 billion).

Eight of the top ten positions were occupied by state-owned or government-linked entities. Heineken Breweries Share Company and Awash Bank Share Company were the only private companies in the top ten, with Awash Bank standing out as the highest-ranked Ethiopian-owned private enterprise.

Leading Taxpayers (FY2025/26)

Rank	Taxpayer	Tax Paid (ETB bn)
1	Ethio Telecom	65.84
2	Commercial Bank of Ethiopia	36.87
3	Ethiopian Airlines Group	30.87
4	Heineken Breweries Share Company	26.10
5	Ethiopian Shipping and Logistics Services Enterprise	22.20
6	Ethiopian Electric Power	18.31
7	Awash Bank Share Company	15.77

The Ministry noted that the overall structure broadly reflects international practice. According to IMF guidance cited during the presentation, large taxpayers typically account for only one to 1.5 percent of a country’s total taxpayer population while generating more than 70 percent of tax revenue.

However, Ethiopia’s figures also illustrate the dominant role state-owned enterprises continue to play in strategic sectors such as telecommunications, aviation, electricity, banking and logistics, leaving government revenue closely tied to the performance of a relatively small number of institutions.

The data further highlight the disparity within the domestic private sector. The 532 domestic private companies administered by the branch contributed an average of approximately ETB 197 million each during the fiscal year. By comparison, Awash Bank alone paid ETB 15.77 billion in taxes, while Ethio Telecom’s payment exceeded ETB 65 billion.

Key Figures at a Glance

Indicator	Value
Total taxpayers	746
Total revenue collected	ETB 522.67 bn
Top 29% of taxpayers generated	80% of revenue
Top 10 taxpayers generated	ETB 254.44 bn (48.71%)
State-owned enterprises’ contribution	ETB 217.87 bn (42%)
Domestic private companies’ contribution	ETB 104.60 bn (20%)
2026/27 revenue target	ETB 816.70 bn (+56%)

The findings come as the government significantly raises its revenue ambitions. The Large Taxpayers Branch Office has been assigned a collection target of ETB 816.70 billion for the 2026/27 fiscal year—56 percent higher than the previous year’s collections—and is expected to generate 76 percent of Ethiopia’s total domestic tax revenue target.

The presentation also identified persistent compliance challenges among smaller taxpayers, including under-declaration of sales, the use of fraudulent invoices and delays in submitting audited financial statements. As Ethiopia pursues substantially higher revenue targets, broadening tax compliance across the wider private sector may prove just as important as maintaining strong contributions from the country’s largest taxpayers, reducing the fiscal dependence on a relatively small group of major contributors.

Source:EBR