The spread of value added tax around the world is unmatched by that of any other tax inrnmodern times. The expansion particularly with the least developed countries indicates arnheavy reliance on the hope that this form of tax will solve the problem of raising revenuernwhile fostering growth in the context of a highly competitive global economy. The mostrnpotential gains linked with the adoption of VAT are revenue and ease of enforcement.rnEthiopia, as part of this expansion, came with this type of tax in 2002 which hasrnrescinded and replaced the sales and excise tax proclamation No 68/1993 (as amended).rnEven if enforcement problem is not a new fangled problem for developing countries, thernpolicy alternative of value added tax in exemptions, rates and thresholds in the one handrnand the stakeholders which include the enforcing body, the taxpayers and consumers onrnthe other hand have their own impact on enforcement. The Ethiopian value added taxrnopts single rate, some exemptions and a threshold of 500,000 from other alternatives.rnThese alternatives are also in one or another way influence the compliance by therntaxpayers and other stakeholders. This paper finds that comparing to the African andrnOECD member countries the Ethiopian value added tax seems well towards thernenforcement which has fifteen percent rate, limited exemptions and high threshold whichrnis 500,000. However, the means of accommodation those businesses below the threshold;rnthe limited capacity and the problems related to estimation and registration of thernenforcing body and lack of awareness, sales register machine problems and fraudulent actrnof taxpayers are the challenges entangled with the enforcement of value added tax inrnEthiopia.rnKey words: Value Added Tax, Enforcement, Taxpayers