The administration of Value Added Tax (VAT) necessitates identification of taxable persons.rnCountries execute this duty through a method of registration. Any country which has acceptedrnthe VAT system should put in place institutional and legal frameworks which are instruments forrnthe registration of taxable persons. In addition to organizing such institutional and legal framernworks, countries should also establish systems which ensure the proper implementation of suchrnlaws by the concerned governmental bodies. Moreover, they should have also a system whichrnevaluates the performance of the institutions and revising laws dealing with VAT registration.rnEthiopia introduced the VAT system by enacting proclamation No 285/2002 in 2002. Thisrnproclamation has incorporated provisions which regulate the registration process of taxablernpersons and other administrative aspects of VAT. Like the laws of other countries, it has also putrnin place institutions which carry out the registration process. Moreover it has empowered thernMinistry of Finance and Economic Cooperation (MoFEC) and the Ethiopian Revenues andrnCustoms Authority (ERCA) to make directives pertaining to VAT registration when the needrnarises.rnThe primary objective of this research was to scrutinize the practical implementation of the VATrnlaw provisions dealing with VAT registration and cancelation and examining practical problemsrnassociated with registration. In addition, it tried to look into treatment of grievances related tornregistration and cancellation. Furthermore attempt was made to evaluate the directive makingrnprocess of (MoFEC) and (ERCA) whether it adheres to the principle of legality or not. In thernprocess of doing this research, the researcher realized the existence of many practical and legalrngaps related to VAT registration. Besides the existence of such practical and legal gaps, thernwriter of this paper has identified that the approach followed by ERCA in the process ofrnregistering the taxable person is against the principle of legality. The research work concludesrnthat the existing legal and practical gaps are critical which can militate against the tax policy ofrnEthiopia in general and the rationale behind VAT registration in particular. So, the researcherrnstrictly recommends that the reexamination of the law and the institutional frame work ofrnEthiopia is very much necessary.