The study looked at how tax revenue affects government spending in Ethiopia from 1974 to 2019. They used data from the World Development Index and the National Bank of Ethiopia. The results showed that tax revenue and previous spending have a positive impact on government expenditure. They also found that there is a causal relationship from tax revenue to government spending. The study suggests that the government should increase its tax base, manage taxes better, and focus on activities that bring in more revenue. This can help reduce budget deficits and ensure sustainable spending on important projects and services.