The government tax income has went down in February following dispute between Somali government and the traders, Finance ministry said Wednesday.
The 5% sale tax imposed last month by Somali government has led hundreds of traders to close their businesses in Mogadishu’s main market, Bakara in a protest against the move for days.
Finance minister, Abdirahman Beileh who spoke to the media in Mogadishu said his ministry did not collect the expected amount of the revenue in February.
“The income revenues of the government in the month of February went down due to the dispute over the enforced tax,” Beileh said.
Despite the decrease in tax revenue, the minister underlined the government will pay the salaries of the civil servants.
The minister has maintained that the tax imposed should be paid to the government despite hopes of further negotiations with the traders.
“Everybody who is living this country must pay the mandatory taxes to the government regardless of the status. The traders must pay taxes same as other traders in other parts of world do, if you don’t want to pay the taxes then leave the country,” Beileh noted.
He pointed out that the tax imposed is far below of what citizens of neighbouring countries pay.
“The taxes the government is much less compared to the other countries in the region. For instance, two countries which I won’t mention their names have 15% and 18% of sales tax therefore our is much lower,” the minister explained.
The minister said that tbe government needs much before it is self-sufficient and securing $4.6 billion international debt relief.
The sentiment of the minister comes just days after talks between the ministry and traders collapsed following intransigence.
While launching the imposed tax last month, minister said domestic revenue was up to $141 million in 2017 from $110 million in 2016.