Taxation System in Somalia - Generating Revenue internally instead of depending on NGO's and Foriegn Aid

[NobleMJ]

I have noticed that the Somali federal government along with it's federal states e.g. puntland etc heavily depend on foreign aid. I understand if it was during the transitional period but it seems that this has become a constant habit. The EU and IMF financial aid are mostly loans or come with ulterior setbacks such as heavy influence or potential neo-colonialism. I believe the federal government can handle it's own affairs if it generates its revenue by collecting all sorts of tax and winning the people's trust. They could also win state government's trust by fairly apportioning the revenues by prioritising projects. If one Somali individual paid 1 Dollar per day which is 360 dollars a year and multiply that by 10 million that gives you 3.6 billion which is more than the current federal GDP. Now i know i make it sound like a piece of cake but i'm saying it could start collecting it from stable areas such as puntland and galmudug and other central areas. people could either pay with their cash if they are able or pay with their livestock's which is about 5 goats a year. The fixed earners such ngo workers or middle class team could pay 20% of their wage.

The government could engage in a contract with any accounting firm to do the external work.

Guys what do you think?

[GAMES]

No one is going to voluntarily pay $1 a day and give it to some government official that god knows what they'd do with it.

Do like what the Americans do, make everything taxable.

What Somalia needs to do is, tax the Banks that send money back.

[BlackVelvet]

I have heard it said multiple times that the aid that was promised never arrived. The SFG's budget is revenue collected from Mogadishu port, airport and business owners ?

[NobleMJ]

No one is going to voluntarily pay $1 a day and give it to some government official that god knows what they'd do with it.

Do like what the Americans do, make everything taxable.

What Somalia needs to do is, tax the Banks that send money back.

Haha true, what we need is a reliable Anti Corruption trust worthy committee independent from the government thoroughly preventing slush funds and irresponsible spending of the government. I believe if Hassan Sheikh goes for such a movement. It would secure his next election or atleast leave behind a great legacy.

[NobleMJ]

I have heard it said multiple times that the aid that was promised never arrived. The SFG's budget is revenue collected from Mogadishu port, airport and business owners ?

I think your talking about the new deal which is 6 billion promised by the EU to Somalia by 2016. And yeah it collects it's taxes from the two main revenue centre's but I believe the government should expand to the rest of the country and cooperate with the state governments.

[sahal80]

The govt has anounced last week collacting tax from all the regions but the regions already collect them by themselves as they dont get shyt from the govt

in some regions like hiiraan the admin collects $30, 000 per week (maybe)

some regions with less production like pl depend heavily on traffic taxation and ports (if your trader, you need to pay for three check points in every region in pl from bosaso to galkacyo)

this has led many of them to use the mogadishu port since the last years.

kismayo admin just collects $40, 000 per ship

what would you think of production if the admin extends to the whole region

[BlackVelvet]

I have heard it said multiple times that the aid that was promised never arrived. The SFG's budget is revenue collected from Mogadishu port, airport and business owners ?

I think your talking about the new deal which is 6 billion promised by the EU to Somalia by 2016. And yeah it collects it's taxes from the two main revenue centre's but I believe the government should expand to the rest of the country and cooperate with the state governments.

Yeah I agree with you. If Somalia's government becomes dependent on foreign aid then we become puppets. Can't have one without the other

We have a chance to do it differently, managing to survive without the 6 billion has shown that it can be done

[NobleMJ]

The govt has anounced last week collacting tax from all the regions but the regions already collect them by themselves as they dont get shyt from the govt

in some regions like hiiraan the admin collects $30, 000 per week (maybe)

some regions with less production like pl depend heavily on traffic taxation and ports (if your trader, you need to pay for three check points in every region in pl from bosaso to galkacyo)

this has led many of them to use the mogadishu port since the last years.

kismayo admin just collects $40, 000 per ship

what would you think of production if the admin extends to the whole region

I don't understand, are you saying Hiiraan generates more revenue than Puntland? and Kismayo 40,000? I think you mean they tax every imported product which totals to 40,000. That's good anyway. Don't you think the Federal government should invest in it's Tourism Section of it's Security Reliable Destinations such as Bosaso, Kismayo and etc. Thus improving the relationships with the inner governmental agencies and splitting the profits 2/3 to Federal Reserve and 1/3 to the Local State reserve since they have invested it with the Federal Reserve money.

[Somaliweyn001]

Governance should start at village level, let the village choose on of their own to be head of the village who will come under the federal government. That way it will be easier for the village chief to pass to his subjects whatever it is expected of them. The chief should be responsible to collect taxes and organize environmental activities such as cleaning the streets and planting trees to make the environment look more appealing. There should be qualifications put in place for the village chief to meet so that he can run for the village election, the main qualification should be that he/she should a son/daughter of that village. This will make them identify themselves with that village and in his/her right mind will only do what's good for his/her village. He/she should trace his/her grandfather to that village. Strict disciplinary actions should be put in place for whoever(village chiefs) strays away from the set of rules set for them by the federal govt. All corrupt Chiefs should be dealt with accordingly and first and foremost removed from power. Contests should be on village beauty such cleanliness and greenliness. I think that's the only way forward for Somalia. Villagers will identify themselves with their forefathers villages and do whatever it takes to see it prosper. Security should start at village level as well. Any newcomer to the village will surely be investigated and looked with a keen eye by the village heads and villages. My theory is that everything good and bad starts at the lowest level others it would have been the government destroying itself from the top level.

[original dervish]

I think he means agriculture/livestock.
I doubt Hiiraan generates more tax than pl.....most of the region is under Al Sahabab.
ps when peace comes....beletweyne will be a livestock hub for Somali region/Ethiopia.

[thegoodshepherd]

You don't want to tax all imports or production. For example, taxing food imports is a stupid move done by all political regions in Somalia. Also taxing livestock exports at a high rate means less income for the poorest pastoralists. Having less tax revenue can actually allow for better allocation of resources. It is better to tax in a discriminate way to avoid putting a burden on poor people.

[sahal80]

The govt has anounced last week collacting tax from all the regions but the regions already collect them by themselves as they dont get shyt from the govt

in some regions like hiiraan the admin collects $30, 000 per week (maybe)

some regions with less production like pl depend heavily on traffic taxation and ports (if your trader, you need to pay for three check points in every region in pl from bosaso to galkacyo)

this has led many of them to use the mogadishu port since the last years.

kismayo admin just collects $40, 000 per ship

what would you think of production if the admin extends to the whole region

I don't understand, are you saying Hiiraan generates more revenue than Puntland? and Kismayo 40,000? I think you mean they tax every imported product which totals to 40,000. That's good anyway. Don't you think the Federal government should invest in it's Tourism Section of it's Security Reliable Destinations such as Bosaso, Kismayo and etc. Thus improving the relationships with the inner governmental agencies and splitting the profits 2/3 to Federal Reserve and 1/3 to the Local State reserve since they have invested it with the Federal Reserve money.

no I mean the highest revenue generated in pl is from the ports and traders while in the south is from the markets. pl economy was depending on the south mainly but now mogadishu port is active

one of the reasons why sl is ahead of pl in this sector is that sl has three income revenues one of them is being connected with the somali region so the traders- both imports and exports-pay fees at tog wajaale

on the other hand pl borders with the somali region is closed.



as for kismayo, yeah i meant for each imports-not the ship owners but per business man, each pays $2000-

[NobleMJ]

The govt has anounced last week collacting tax from all the regions but the regions already collect them by themselves as they dont get shyt from the govt

in some regions like hiiraan the admin collects $30, 000 per week (maybe)

some regions with less production like pl depend heavily on traffic taxation and ports (if your trader, you need to pay for three check points in every region in pl from bosaso to galkacyo)

this has led many of them to use the mogadishu port since the last years.

kismayo admin just collects $40, 000 per ship

what would you think of production if the admin extends to the whole region

I don't understand, are you saying Hiiraan generates more revenue than Puntland? and Kismayo 40,000? I think you mean they tax every imported product which totals to 40,000. That's good anyway. Don't you think the Federal government should invest in it's Tourism Section of it's Security Reliable Destinations such as Bosaso, Kismayo and etc. Thus improving the relationships with the inner governmental agencies and splitting the profits 2/3 to Federal Reserve and 1/3 to the Local State reserve since they have invested it with the Federal Reserve money.

no I mean the highest revenue generated in pl is from the ports and traders while in the south is from the markets. pl economy was depending on the south mainly but now mogadishu port is active

one of the reasons why sl is ahead of pl in this sector is that sl has three income revenues one of them is being connected with the somali region so the traders- both imports and exports-pay fees at tog wajaale

on the other hand pl borders with the somali region is closed.



as for kismayo, yeah i meant for each imports-not the ship owners but per business man, each pays $2000-

Yeah true mashallah, Somaliland generates 300 million - 400 million compared to 60 million gdp of Puntland. Yeah I herd that since the Mogadishu and kismayo port are back on their feet now Bosaso port hardly generates any revenue. However they have recently opened a new border and opened a custom office on the border of Ethio Somali Region and Goldogob, Puntland it'll take time to stabilise economically though. The Bosaso Airport along with Garowe and Galkayo is currently being constructed and renovated so it could compete with Mogadhishu and Hargeisa Airports. Hopefully that'll steadily improve the revenue up north.


P.S what are the other two revenue centres of Somaliland, and what do you think of my tourism idea? The beaches..

[NobleMJ]

You don't want to tax all imports or production. For example, taxing food imports is a stupid move done by all political regions in Somalia. Also taxing livestock exports at a high rate means less income for the poorest pastoralists. Having less tax revenue can actually allow for better allocation of resources. It is better to tax in a discriminate way to avoid putting a burden on poor people.

Better allocation of resources? do you mean from the Federal government? and yeah I know what you mean? But the people should sacrifice their daily shah and bashaal pocket money for the sake of better service and better functional government at least until the government could stand on it's feet financially. They should also pass down International investment/ Business and Management laws for Direct foreign investments. Don't you think?

[thegoodshepherd]

on the other hand pl borders with the somali region is closed.

Not true at all. Galkacyo receives the livestock exports of DDSI. The eastern parts of DDSI export their livestock through Bosaso, which means crossing the border to Galkacyo. It is just that before there was no taxation or a border crossing that was regulated. But now there is a customs station at Turdibi near Goldogob.