Advance tax rulings have several advantages for both taxpayers and tar: authorities in their dealing with tax laws. Advance tax rulings bring certainty on the tax implications of transactions, help to simplify lax laws. ht'IJI tax authorities to he more efficient. increase voluntary compliance of taxpayers. help to reduct> tax authorities' discretion and reduce potential Lux disputes. Owing to these advantages, advance tax rulings are considered indispensable in the modem world of tax administratlon. So far, several lax jurisdictions across the world have incorporated advance tar: rulings in their tax system. However. advance tax rulings have 110 legal basis in Ethiopia so fur though the country has put in place I various lax laws. Tiu> aim of this paper is lo investigate the need and importance of advance lax ruli11;:s for the proper implementation of tax laws in Ethiopia. The paper discusses tlte necessity and significance I cf' advance lax rulings in light of the best practices of selected foreign jurisdictions and problems investigated in Ethiop«: The study has found our that the Ethiopian tax leglslation and administration fields are complex making taxpayers feel uncertain about their tax obligations. !11 addition 10 non-simplicity of lax laws. ii is also .fo11T1d that there is considerable non-compliance with tax laws. Because of inadequacy of tax education and trainings. iris fo1111d that significant number of taxpayers approach officials of the lax authorities in order to seek the opinions/advice of tire same. The study has revealed that tax authorities engaged in practices of i~;:.11i11g statement» oj opinions/advice i11 order to reduce uncertainties. simplify tax laws, and I increase compliance, though inadequate. The research has identified 11ta1 advance knowledge of tax laws helps to reduce the authorities· discretion and reduces disputes that arise between the tax authority uut! the taxpayer ft hos demonstrated that the current practices of issuing statements of opinions/ delivering advice are not adequate and it is verified that advance tax rulings is necessary and important. Based O!I the problems investigated, the study suggested Ihm the Ethiopian advance lax ruling scheme should provide binding rulings like USA. India, and South African regime. lo reduce uncertainties of tax law. Like USA. South Africa and Canada, Public and private ruling types are also suggested i11 order to minimize confusions of taxpayers' OTI Ethiopian tax laws. Rulings are also suggested to be issued bv I centralized tax authorities on at least issue of fuels. i11 order to make the application of tax laws consistent and meaningful.