Hirshabelle state on Tuesday imposed significant tax increases on Khat, unprocessed Tobacco and cigarette.
In a statement by the state’s Finance Ministry, Hirshabelle had increased the tax on khat from $0.3 to $1.50 per kilo, a move that will see the Khat consumers to pay more for their stimulant drug.
The taxes on unprocessed Tobacco will also increase by up to $30 per 50kg bag while the cigarette will rise by up to $30 per carton.
“Following deliberations and requests made by Hirshabelle and Galmudug states, the federal government allowed these two states to start the taxation of these three items from low amount, therefore the traders in Hirshabelle are needed to pay the following amount, $1.50 for the tax per kilo of Khat, $30 as the tax for per carton of cigarette and $30 as for per 50kg of unprocessed Tobacco,” reads the statement.
Initially the federal government and regional states had agreed to impose the three items a harmonized tax amount, according the statement.
The ministries from Federal and the state endorsed the tax of one kilo of khat to be $2.50 as the other two remain the aforementioned amount.
Somalia which once was a producer and exporter of cigarette before the fall of the government led by late Mohamed Siyad Barre is now spending millions of U.S. dollars to import the cigarette.
This tax increase is will reduce the consumption of the drugs which had economic and health impact to Somali people.
Hirshabelle state will be the first regional state to start imposing heavy levy on these hazardous drugs.
Somalia government had severally suspended the khat which is imported from the neighbouring Kenya.
The cultivation of Khat is a huge source of income for millions of Kenyan small scale farmers.
According to EU report in 2016, Kenya generates over $100 million per year for the export of this plant to Somalia.
Khat, a multi-million dollar business for Ethiopia, Kenya and Yemen, consist of succulent purple-stemmed leaves and shoots, a bush whose scientific name is Cath edulis.
The leaves of the plant are chewed for their stimulating and euphoric effect.
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