Many countries have acceded and others are acceding to the WTO liberalized multilateral trading system. It has passed also more than fourteen years since the Ethiopian government formally applied for accession. However, it is known that WTO accession is not for free. A country wishing to join the Organization is required to purchase its membership ticket by making binding commitments in both the areas of goods and services. More particularly, acceding countries have to carry out significant reforms in their policies, laws and institutions to ensure full compatibility of their domestic legislations with that of the WTO commitments. In this study, Ethiopia’s tax policy and taxation laws (more particularly customs and other trade tax laws) and their contributions to the total tax revenue are analyzed along with the WTO tariff and tax related commitments, in order to assess the potential implications of Ethiopia’s WTO accession on its tax policy, tariffs revenue and tax administration, from legal and policy perspectives. Hence, the paper analyzes the extent to which WTO rules impinge on policymakers’ freedom to formulate tax policies, tax laws and customs procedures, with particular emphasis on Ethiopia’s WTO accession. Therefore, all the issues revolve this main subject of the study and are discussed briefly and structurally in five chapters, the details of which are expressed under Section 1.10. To that end, the research adopts qualitative legal research methods. Hence, taxation rules in the WTO agreements, the vast WTO literatures on tariffs and tax commitments, Ethiopian tax policy and laws and experiences of acceded LDCs are consulted. The researcher also had interviews with senior experts at MOFEC, MOT, ERCA and Addis Ababa University instructors. The main finding of the study is that Ethiopia’s accession to the WTO will bring both opportunities and challenges to the country’s taxation system. As an opportunity, advancement of the tax administration and particularly customs valuation procedures and practices, accessibility of tax laws, transparency and independency of ERCA are discussed. It is also shown that considering Ethiopia’s current average applied tariff rates and the ongoing negotiations on goods offer, it is less likely for Ethiopia to lower its average applied tariff rates as part of its accession commitment. However, it is indicated that the country may eliminate its sur tax and export taxes and that may result in loss of revenues. It is also indicated that unless Ethiopia completes its accession process sooner, the country will most likely, be requested to lower its applied tariff when joining WTO. Thus, to pay off such a potential revenue loss, as a solution, broadening the domestic tax base and advancing the tax administration has been discussed. The study also indicated that Ethiopia, upon accession, may need new rules and institutions in relation to antidumping, countervailing and safeguarding measures to control the importation of subsidized products or imports priced below fair market value. Finally, the study concludes that under the WTO multilateral trading system, Ethiopia’s customs and tax instrumentality as a policy tool will be restricted and this will bring both opportunities and challenges to the Ethiopian taxation system and tax revenue. As a result, the research recommends for Ethiopia to push forward its accession process, continuing the shift from reliance on trade tax revenues to domestic taxes and modernize its tax administration and collection system.