Somali Gov’t Exempts Hospitals From New Sales Tax

GOOBJOOG NEWS/MOGADISHU: The Federal Government has announced a waiver of Value Added Tax (VAT) for hospitals in the country following the coming into force of the new tax regime.

Health Deputy Minister Abdiqafar Haange said the government had taken into consideration concerns by hospitals and decided to exempt them from VAT to support the growth of the medical sector to ensure it caters for the needs of the citizens.

The Deputy Minister added that the decision was also based on best practices by countries in the region and other parts of the continent which exempt medical facilities from VAT since they offer critical services. The VAT applies to purchase of equipment and other consumables by hospitals.

The introduction of 5% VAT sparked sharp criticism by traders especially in Mogadishu leading to closure of city’s biggest market-Bakaro for two days. However, talks between the government and traders ended the strike.

The introduction of VAT is critical for the government to boost domestic revenue and reduce dependency on donors and loans.