India and Ethiopia Adjust National Tax Policies Amid Trade and Economic Pressures - September 2025

India has significantly cut taxes on hundreds of goods by simplifying its Goods and Services Tax (GST) structure into two main slabs of 5% and 18%, effective September 22. This policy change is aimed at boosting domestic consumption and mitigating the potential economic impact of steep 50% US tariffs imposed by President Donald Trump, which became effective on August 27. The US tariffs have put Delhi in a difficult position, leading to geopolitical signaling rather than direct retaliation. In a separate move to increase government revenue, Ethiopia has broadened its Value Added Tax (VAT) system through Directive No. 1104/2025. The new regulations mandate more businesses and professionals to register for VAT, a move designed to boost compliance and expand the nation's tax base.