Withholding Tax on Wheat Payments Lifted

Oct 26 , 2025

The long-standing tax dispute between wheat processors and the Ministry of Revenue has been resolved. In a circular, the Ministry of Revenue confirmed that the Ministry of Finance had acted on repeated complaints from wheat processors regarding tax treatment of payments for wheat purchases. A letter signed by Eyob Tekalign (PhD), former State Minister of Finance and current Governor of the National Bank of Ethiopia(NBE), noted that the issue had created pressure for both manufacturers and wheat sellers, prompting numerous questions and concerns. Key decisions outlined include the removal of the withholding tax on wheat payments. A tax decision notice and the Tax Appeals Tribunal mandate that the change be applied to all ongoing and future audits to ensure compliance and accuracy. Until the transaction system is modernised, payments made through purchase vouchers must be transferred via bank to wheat sellers, regardless of the amount. The Ministry confirmed that expenses incurred to produce wheat flour according to required standards will continue to be recognised for tax purposes.