Ethiopia, 25 October 2025 - The Central Bank of Ethiopia has issued a directive banning the use of personal or third-party bank accounts for managing finances of commercial entities and businesses nationwide.
The action follows a wide-ranging investigation by the Central Bank, which revealed many businesses and traders were conducting transactions through unregistered or informal accounts, bypassing officially recognized business bank accounts. The decisive move is aimed at strengthening financial transparency and oversight countrywide.
According to NBE, this widespread practice demonstrated “an attempt to evade oversight by tax authorities,” raising concerns regarding potential money laundering or other illicit financial activities.
“The National Bank of Ethiopia will take coordinated measures to end these unlawful practices to ensure trust in the financial system and the overall stability of the national economy,” the statement read.
The new measure is part of the Ethiopian government’s broader effort to strengthen domestic revenue collection, particularly by boosting the collection of key taxes that form the foundation of the national budget.
· Corporate Income Tax (CIT): Set at 30 per cent of net profits after deducting business expenses. This tax applies to all registered businesses operating in Ethiopia.
· Value Added Tax (VAT): Fixed at 15 per cent on all goods and services sold within the country, levied on consumers at the point of purchase.
The Ministry of Finance emphasized the crucial role these taxes play in funding public services, developing infrastructure, and supporting national development projects.
The Central Bank clarified that the directive is part of a comprehensive effort to safeguard the financial system’s integrity, actively combat the informal economy and ultimately reinforce public trust in the country’s banking and commercial environment.
