(Isbahaysi, Mogadishu) The sales tax of 5%, which is causing the stand-off between the federal government and businesses in Mogadishu, started in 2018, and it is not new. The Finance Minister Bihi Iman Egeh said this last night after a disastrous public statement by President Hassan Sheikh Mohamud, who seemed to be berating the public like they were his own children.
The Somali business community said they were ready to pay the taxes after last-minute crisis meetings at Villa Somalia last night. But, they said this was conditional on the cancellation of all the other illegal charges at the seaport. These charges total around 9 according to the business leaders and include service fees by Al Bayrak, the port operator, NISA, transport out of the port, and Bureau of Standards. There is even mandatory container washing, according to businesses. On the way to their destinations, the vehicle’s carrying goods to ships or warehouses are stopped at checkpoints and extorted further by security forces. This is not the way businesses can succeed in Somalia.
The Somali people are tired of high prices and government taxes, which they have no influence over. However, the business community is ready to pay if there is transparency in who is collecting what, how much, when, and where this money goes. The government has so far failed to communicate this.
According to high-ranking members of the Somali business community, the sales tax and the rental tax that the government collects are collected by a private company linked to the president’s family and other government officials. These business leaders who did not want to be identified requested that the Ministry of Finance make public the tender process for recruiting these companies. They also want to make public the contractual agreement and percentage awarded to the companies for their role.
The President claimed to use taxes to pay salaries of civil servants. How much he and his government wastes on questionable foreign travel. Make public the FGS travel expense for the last 2 years.
President Hassan Sheikh Mohamud and Minister Bihi Iman have to build trust by being transparent.
