(18 Aug 2024) MOGADISHU (Halqabsi News) – A new Value Added Tax (VAT) system has been introduced in Somalia today, marking a shift from the direct taxation previously implemented in Mogadishu. The government has decoupled the tax from merchant accounts, placing the collection responsibility on businesses.
However, the 5% VAT, while touted as the lowest in the Horn of Africa, has been met with resistance. Business owners argue that the tax burden ultimately falls on consumers, further straining the population amidst a challenging economic climate.
In response to the VAT introduction, businesses in Mogadishu, including traders in the bustling Bakara market, staged a shutdown today. The move underscores growing discontent with the tax, which is seen as an additional financial burden on an already struggling population.
Earlier discussions between the government and business leaders on the VAT’s implementation failed to assuage concerns. Critics argue that the tax, collected under various guises, will exacerbate the financial hardship many in the capital face.
The protests highlight the challenges the government faces in implementing economic reforms in a country still grappling with widespread poverty and instability.
Halqabsi News
