The Minister of Finance of the Republic of Somaliland Dr. Saad Ali Shire together with the Director General of the Ministry of Finance, the Mayor of Burao District, the Deputy Governor of Togdher Region, the Executive Secretary of Local Government and other officials opened a well-organized event in Burao.
This annual forum aims to give businessmen {Taxpayer} and the Heads of the Ministry an opportunity to exchange any questions and suggestions that both parties have, and was attended by 84 members including hotel owners and managers, local factories, telecommunications companies, electricity providers, Burao Water Agency and other similar entities whose sales are subject to sales tax.
This forum which is held once a year as we mentioned above members of businessmen/women from various business sectors, it’s the fourth time, and it is the first time that it is held outside of Hargeisa City. Each year, a specific theme is chosen depending on the topic that is considered worthy of focus, and this forum’s theme was “Raising Community Awareness of Goods & Services Tax”, during the event, they exchanged ideas and suggestions, on the other hand, the participants shared their questions with the Heads of the Ministry.
The Tax Forum of 2024 which was sponsored by the World Bank is part of the program of expansion and advance of GST {Goods & Services Tax}, this type of tax which is indirect-tax is since the seller transfers to the buyer or customer. According to the Somaliland Inland Revenue Act Law No. 72/2016 this tax is applicable to the following categories:
- Sales made by hotels/restaurants such as; sales of food, beverages, lodging services, various events and parties.
- Communication services.
- Electricity/lighting services.
- Domestically manufactured products.
- Sales of water.
- Sales made by televisions {Example: Receivers for rent}.
- Sales of transport tickets {air and land}.
- And the other similar areas.
In conclusion, the Goods and Services Tax is not new, but what is new is only by modernizing the way it is carried out, and at the same time it is intended to be expanded so that it can be fully implemented across the country.
Somaliland Ministry of Finance based on the Financial Management Act of Regulation No. 75/2018, applying the Principles of the Public Finance Management Reform Program, and at the same time taking advantage of modern technology, in 2021 it began to install EFDs {Fiscal Electronic Devises} GST machines in hotels to obtain a secure and reliable tax return. The first phase was started in the capital city of Hargeisa with around 300 hotels fully implemented, and the next phase was passed to the cities of Berbera, Borama, Tog-Wajale and Burao. Domestic tax revenue is 25% of the Government’s revenue, while the other 75% comes from Customs, and the goal is to strengthen or increase domestic revenue to reduce over-dependence on customs revenue.