This stud y looks in to the productivity of the tax system in Ethiopia and the effects of the 1990 srnliberalization reforms on it using a quantified approach. Results of econometric regression havernshown that the tax system in Ethiopia is in e last ic. This result would mean that the tax system inrnEthiopia has not been able to gene rate the potential level of revenues from the level of nationalrnincome in the country with out adjustment of tax rates. The tax system is found to be inelastic rnmainly due to in elastic base to income responses in most of the tax regimes.rnthe look in to the effects of the liberalization reforms has shown that most of the major taxrncategories have not felt impact while the overall tax system appears to be slightly positively rnaffected. This improvement could be due to the improvement in one major tax category namely,rnbusiness income tax , from the five categories considered in this stud y and to potentialrnimprovements elsewhere.rnMost of the major tax categories together with the overall tax system have shown that theyrnpossess a buoyancy coefficient that exceeds their respective elasticity coefficients . Moreover, therntax buoyancies in most cases are found to be slightly positively affected by the above-mentionedrnreform. rnThe major recommend action of this stud y is t hat the attempt to improve the productivity of the taxrnsystem in Ethiopia should give greater emphasis is to the issue of tax base to income elasticity rnimprovement.