Somali government carries out fiscal reforms and harmonized tax initiatives after two months of 5% tax sales squabbles, ministry for finance confirmed.
During weekly cabinet meeting on Thursday, Abdirahman Beileh, minister of finance said his ministry focuses on harmonizing fiscal policies to raise domestic revenues.
Minister submitted a report on fiscal and economic progress his ministry achieved and plans to reform the taxes to the cabinet ministers.
The ministry had held discussions with the state members of the Federal Government on the revving the long-defunct harmonized taxes this month for the first time since 1991 when the country plunged into civil war, according to Beileh.
“Fiscal federalism meeting in Mogadishu produced promising outcomes in which we will build on. We will work together for a better fiscal and economic future for Somalia and our people,” said Beileh in a twitter post after the conclusion of the first meeting on harmonizing taxes which took place on 10th March.
Somali president, Mohamed Abdullahi last week said his government is committed to overcome the problems of tax policy harmonization.
The President pointed out that Somalia’s Gross Domestic Product (GPD) has rapidly improved, thanks to the fight against the corruption that seriously ravaged the different departments of the government.
” The GPD of the country for the first in decades has increased to 7.2% in 2017 down from 4.6%, due to accountability and transparency that was implemented by the government,” Farmajo said during his speech at the opening of the parliament session last week.
Mr. Farmajo had called on the public to pay the mandatory taxes to the government.
“The public should pay taxes so that we rebuild our forces to fight against Al-shabab. We need to pay the civil servants and our armed forces regularly,” the President urged the public.
Last Month, Somali Finance Ministry imposed 5% sales tax on imported goods, a move the government aims at boosting the domestic revenues in a bid to reduce over-reliance on donors for fund and pay the $5.2 billion International debt.
The introduction of the tax led thousands of traders to down their tools in protest against the tax imposed, prompting serious economic implications for the tax revenue collection system, according the ministry.
Despite those setbacks, during a press conference early this month, Minister Beileh maintained taxes ought to be paid to enable the government to offer services.
Beileh said the government needed money to hit the target proposed by International Monetary Fund (IMF)
“The IMF has given us a target of $41 million through taxes between December and March this year,” Beileh told the reporters.
Last year, Somali parliament approved $274 million budget for 2018 which was higher than that of 2017 of $267 million, a move welcomed by UN.
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