Thursday August 22, 2024
FILE - The Somali Cabinet meets in Mogadishu, chaired by Prime Minister Hamza Abdi Barre.
Mogadishu (HOL) — The Somali Federal Government has recently mandated that all revenue collection be consolidated under the Ministry of Finance, using the Single Treasury Account (TSA).
This directive designates the Ministry of Finance as the sole authority for handling, monitoring, and collecting all forms of federal revenue, such as taxes, fees, and fines.
"The centralization of revenue collection under the Single Treasury Account (TSA) is critical to enhancing transparency and accountability across all government financial operations," according to the statement released by the Office of the Prime Minister.
The statement explicitly prohibited other governmental agencies, both civilian and military, from engaging in any form of revenue collection or management.
It added that the Minister of Finance has been granted the authority to adjust and establish tariffs and fees related to government revenue.
The directive noted that all economic contracts must comply with the 2019 Public Financial Management Law and the 2016 National Procurement Law. The Prime Minister has directed the Ministry of Finance to review all international agreements to ensure compliance and avoid legal penalties.
To improve operational efficiency at the Port of Mogadishu, the government has introduced a 50% reduction in scanning fees for goods entering the port. A standardized fee of $40 for the Port Access Permit has been established, with a cap of $110 to prevent excessive charges.
"Strict adherence to these regulations is crucial for ensuring that the intended improvements in transparency and accountability are realized." the statement read.
The decision to centralize revenue collection comes amid broader economic reforms that include the recent implementation of a 5% sales tax, which has sparked widespread protests and resistance from some regional administrations. In particular, the new tax has been met with significant opposition in regions like Jubbaland, where local officials have rejected the federal tax scheme and urged businesses to continue operating under regional tax laws.
Despite this resistance, the Federation of Somali Trade Unions (FESTU) has voiced strong support for the federal government's efforts to enhance fiscal transparency. FESTU, representing over 173,000 workers, praised the move as a necessary step towards modernizing Somalia's tax system and ensuring that public funds are used effectively for national development.