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Somaliland Plans to Enforce Compliance on Tax, Double Revenue

March 31, 2011, 8:26 AM EDT

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March 31 (Bloomberg) -- Somaliland, the breakaway republic in northern Somalia, may double revenue collection this year as it enforces tax compliance among the country’s 40 biggest businesses and richest individuals, the Finance Ministry said.

The autonomous region expects government income to total $100 million this year, even after the government slashed tax rates and abolished other levies, Vice Finance Minister Warsame Said Abdi told reporters in the capital, Hargeisa, yesterday. As of Jan. 1, payroll and sales taxes fell to 5 percent from 12 percent, while income taxes dropped to 10 percent from as much as 25 percent, Abdi said.

“Somaliland people aren’t tax-oriented,” he said. “What they give to the government is seen as a loss. We are trying to educate them. We’ll use it to build schools, hospitals.”

Somaliland, a former British colony, declared independence from Somalia in 1991 after the fall of dictator Mohammed Siad Barre. While no country has yet officially recognized its independence it has remained largely free of the clan warfare, kidnappings and assassinations that have plagued Somalia.

Somaliland’s government relies entirely on taxes for its budgetary expenses and is debt-free, Abdi said. Foreign assistance is not channeled through the government, he said.

The World Bank is helping to train tax officials and the United States’ aid agency this week agreed to build 10 state revenue centers across Somaliland, Hassan Jama Mohamed, the Finance Ministry’s public finance management coordinator, said in Hargeisa yesterday.

Revenue Loss

The loss of annual revenue from Telesom, the country’s biggest telecommunications operator, alone is about $25 million, because of authorities failing to enforce the domestic tax laws, according to Abdi.

“We haven’t had the capacity to do the auditing or enforce the existing laws,” Mohamed said.

The government is counting on improved revenue collection this year to pay for a doubling of salaries for civil servants, the police and military and a free primary-school education program introduced at the start of the year, he said.

--Editors: Paul Richardson, Karl Maier.

Somaliland’s government relies entirely on taxes for its budgetary expenses and is debt-free

seemeyer wrote:

Somaliland’s government relies entirely on taxes for its budgetary expenses and is debt-free

The loss of annual revenue from Telesom, the country’s biggest telecommunications operator, alone is about $25 million, because of authorities failing to enforce the domestic tax laws, according to Abdi.

seemeyer wrote:

Somaliland’s government relies entirely on taxes for its budgetary expenses and is debt-free

juzme123 wrote:

The loss of annual revenue from Telesom, the country’s biggest telecommunications operator, alone is about $25 million, because of authorities failing to enforce the domestic tax laws, according to Abdi.

This bit of the article I didn't understand. Profit is always less than revenue. Though taxation will affect the final amount of profit payable/attibutable to shareholders, tax has no bearing on the revenue that a company is able to earn. So the above sentence from the article doesn't make sense

malakumod wrote:

seemeyer wrote:

Somaliland’s government relies entirely on taxes for its budgetary expenses and is debt-free

That is because it cannot get a loan. A homeless man saling the big issue has better chances of receiving finance or credit from the IMF than somaliland. Sorry for spoiling your prade. Loool

abdikarim86 wrote: (1) Isn't it true some people are trying to avoid this?
(2) And what on the progress regarding the Income tax law
Ina Xaashi often talks about?

djibsomali wrote:why is it always the mirqan man shot himself down!!

debt free
ahaahahah

debt free
looooooooooooooooooool


since when an inrecognised entity get fund from world bank and IMF???

of course the guy who is herding his camels in hawd is debt free!!!

djibsomali wrote:why is it always the mirqan man shot himself down!!

debt free
ahaahahah

debt free
looooooooooooooooooool


since when an inrecognised entity get fund from world bank and IMF???

of course the guy who is herding his camels in hawd is debt free!!!

djibsomali wrote:why is it always the mirqan man shot himself down!!

debt free
ahaahahah

debt free
looooooooooooooooooool


since when an inrecognised entity get fund from world bank and IMF???

of course the guy who is herding his camels in hawd is debt free!!!