The principle of legality dictates that taxes must have firm legal basis, which necessitate putting in place legal and institutional frameworks. This in turn requires drafting of tax laws. Tax law drafting is evaluated by the criteria of understandability, effectiveness, organization and integration. To pass these test, a drafter, in the course of drafting, take into consider the basic principles and rules of tax law drafting such as clarity, simplicity, less-cross reference, flexible, coherent, efficient and plain English. However, tax law drafting in Ethiopia fails to meet these substantive, technical and procedural requirement of a legislation. That is why, it’s common to see in the tax laws too many technical words, too many cross-references, exception over-exceptions, contradictions, loopholes and fragmentations. No doubt, that poorly structured and drafted tax law imposes high costs and burdens on the taxpayers as well as tax authority. Most of the problems that arise during administration and implementation of tax emanates from ambiguities, loopholes and contradiction in the tax laws itself, which is one manifestation of poor drafting. A case in point is tax avoidance issues which is pursued through exploiting the gaps in the tax laws. In general, the process, procedure, structure, design, form, and substantive content of tax laws drafting in Ethiopia are mingled with many challenges and difficulties. Given that identifying and understanding the problem is a half way to solution, no doubt that there is an urgent need to investigate those challenges associated with tax laws drafting in Ethiopia. Accordingly, the central aim of this research is to critically explore, examine, and analyze the challenges of tax law drafting in Ethiopia. In an attempt to accomplish this purpose of the study, the researcher employed doctrinal and qualitative research approach through consulting foreign countries experience and literature review methods. The finding of this research is that in Ethiopia (i) there is no clearly mandated Government organ to draft tax laws, (2) lack of comprehensive tax policy and policy instruction, (3) only foreign tax law drafter drafting tax laws and non-involvement of economists, accountants and so on, (4) mass and mis-transplantation of foreign tax laws, (5) lack of qualified and experienced drafter and translator,(6) absence of transparency, participation and meaningful consultation, and (7) lack of comprehensive tax law drafting manual. Finally, the researcher suggested that Ethiopia needs to work on those challenges such as via giving training to policy maker, drafter and translator.