Beileh maintains stand on sales tax as traders cry foul

Finance Minister Abdirahman Beileh has maintained traders must pay taxes just as is practice in other parts of the world but steered clear of the talks with traders.

Addressing the media Wednesday a day after traders in Mogadishu announced the tax talks with the government had collapsed, Beileh said ‘the government expects traders to meet their tax obligations without fail.

The Minister added the government needed the money to function and provide services to the public noting the execution of the 2018 budget is dependent on the citizens paying taxes. “The IMF has given us a target of $41 million through taxes between December and March this year,” said Beileh.

Traders Tuesday accused the minister of ignoring their plight leading to collapse of the talks. They also termed the tax as illegal.

But Beileh reiterated the sales tax which is billed at 5% is in line with article 2 of the 1984 Revenue Act. A former finance minister and current MP Abdullahi Nur told Goobjoog News Tuesday there was no legal basis noting tax collection in Somalia is based on negotiations.

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Beileh said yesterday the taxes demanded from the traders is way below what citizens in neighbouring countries pay. “As compared to other countries in the region, ours is the lowest. For example two countries which I won’t mention charge 15% or 18% so ours is much lower.”

Sales tax rate in Kenya stands at 16% while in Uganda the government takes 18% same as Tanzania.

Hotels, banks and remittance companies must submit their receipts for payment of taxes by the end of the month as earlier agreed, the minister added.

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