Somali traders, government locked in dispute over new tax

A major deadlock between Somali authorities and the business community is threatening to have serious economic implications in a nation overcoming decades of conflict.

Traders in Somalia’s largest market, Bakara, have boycotted business over what they termed as punitive tax measures imposed by the government.

While speaking to Xinhua news agency, the traders said that they will keep off from the Mogadishu-based market until the federal government scraps the 5 percent mandatory sales tax it imposed recently.

“As you see the market has closed and we will continue until the government responds to our complaint about the tax,” Abdisamad Mohamed, one of the traders, told Xinhua.

“We are not refusing to pay taxes but this is heavy burden for our business,” Mohamed said. “We are requesting the government to take steps to lower it.”

Somali Finance Minister Abdirahman Beileh has maintained that taxes must be paid to enable the government to offer services insisting that the government had arrived at the decision and that it was not optional.

“I clarified the purpose of the sales tax and the importance of paying legally mandated taxes to the Somali people. The payment, collection and budgeted utilization of these funds is a must for Somali development,” Beileh said. “We must finance our future. This is the bottom line.”

CGTN’s Abdulaziz Billow reports now from Mogadishu on a dispute that was ignited by the introduction of sales Tax.

The government has not yet responded to the ongoing strike.