Somali Business Traders Decry ‘REPRESSIVE TAXATION’ As Finance Ministry Rejects Audits Accounts..

Business leaders in Mogadishu have called on the Federal Government of Somalia “to rein in its security forces, which use coercive tactics to collect taxes from businesses”, For the third consecutive day, most markets in Mogadishu remain closed…

Business leaders held a press conference in Mogadishu today to voice their concerns about what they described as “a repressive securitisation atmosphere that makes conducting business extremely difficult”, “We have urged business owners to abide by the rules. Unfortunately, when they go to the inland tax office of the Finance Ministry, they are asked to declare the number of employees in their business. If, for example, a business owner declares that he/she has  five employees, tax office officials reject the information outright and insist that more staff work for the business than declared.

The tax office staff then demand disclosure of the past annual accounts of the business so they can decide how much tax to levy” said Hassan Mire Dhiif, the Chairman of the Mogadishu Business Council, Mr Dhiif added that the Finance Ministry calculates tax not based on the audited annual accounts of a business. The practice of the Somali Finance Ministry disregarding professionally audited accounts in favour of imposing steep tax liabilities on businesses in Mogadishu remains a major barrier to entrepreneurship.

Last year, President Hassan Sheikh Mohamud vowed to use security forces to collect taxes from businesses. The empowerment of National Intelligence and Security Agency officers to work alongside tax officers from the Finance Ministry has created loopholes that unscrupulous intelligence officers exploit, threatening business owners with arrest unless they pay bribes to reduce their tax liabilities.

Members of the Mogadishu Business Council have called on the Federal Government of Somalia to intervene and end the unfavourable business environment created by intelligence officers and tax collectors who resort to extortion under the guise of state authority.