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Somali govt to tax foreign firms operating from Mogadishu airport

For years, foreign firms have evaded taxation and operated outside the government’s authority, something which sparked an outrage across the country.

By Jeff Mwaura, jeff@alleastafrica.com

NAIROBI – Somalia’s central government has taken an unusual step for the fist time in decades and announced that it has reintroduced taxes for foreign companies operating from the heavily fortified Mogadishu airport.

For years, foreign firms have evaded taxation and operated outside the government’s authority, something which sparked an outrage across the country.

Minister of Information, Culture and Tourism, Abdirahman Omar Osman, says that out of 157 companies operating from the airport, only nine currently pay taxes.

“It is only right and proper that these companies, who profit from the situation in Somalia, contribute towards ending the political turmoil of the past and help build a prosperous and peaceful future,” Mr Osman said in a statement on Tuesday.

“A taxation task force will be established to negotiate with each company and payments will be back-dated to the start of their presence in Somalia,” he said.

Regulate foreign firms

The new development signals the government’s intention to regulate the activities of foreign companies and raise revenues for the Horn country.

Financial institutions in the Somalia including the central bank and tax collection systems crumbled after the fall of the Siad Barre regime in 1991.

The post-transition government is gradually reintroducing proper systems for commerce, trade, fiscal policies and agencies to collect taxes and duties.

Mr Osman said these companies provide important support to the United Nations, the international community and aid agencies, who pay well for these services.

Ministries have been directed to ensure that the firms are fully licenced to operate in the country and that they employ Somali citizens rather than foreigners.

Mr Oman said a meeting convened last week on taxation measures saw representatives from these companies express their willingness to pay tax and inquired about the process.

During the meeting, Somali Finance Minister Abdirahman Duale Beileh reassured them that taxation will be handled in accordance with international standards and be monitored to ensure transparency and accountability.

Xinhua contributed to this report

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