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Somalia’s Finance Ministry Announces Plans to Expand Tax Collection Avenues

Storyline:Business, National News

GOOBJOOG NEWS | MOGADISHU: Somalia has announced plans to boost revenue generation by expanding its Value Added Tax (VAT) regime effective April 1st as part of efforts to bolster economic stability.

According to a statement from the ministry, a 5 percent VAT rate will be imposed on a wide range of businesses, including utility companies, telecommunications providers, TV cable operators, restaurants, law firms, private security companies, healthcare providers, and insurance agencies.

The Ministry said the decision to extend VAT coverage to additional sectors is part of the government’s efforts to generate additional funds to support public services and infrastructure development initiatives.

Further, the ministry stated that the expansion of VAT collection is expected to contribute to a substantial increase in domestic income, with reports indicating a consistent 25 percent monthly growth over the past eight months.

This significant expansion of the VAT system marks a milestone in Somalia’s fiscal policy, as the government aims to broaden its tax base and increase revenue streams.

Previously, VAT collection has been limited to specific sectors such as imports, wholesale transactions, hotels, and the manufacturing industry.