Bakara Market traders suspend business over new government tax

Bakara Market traders suspend business over new government tax

Businesses in Somalia’s largest open-air market, Bakara have boycotted trade over the introduction of a 5% sales tax on all goods sold and services rendered. The traders have vowed to keep the market closed until the government eliminates the tax altogether.

There are also reports that businessmen have refused to offload their goods from Mogadishu’s port in protest of the levy.

The decision to introduce the sales tax have pitted the cash-strapped Somali government against the business community who are pushing back against what they see as unfair taxation.

“The government wants to tax us in Bakara and Mogadishu, but what will we receive in return?” Mohamed Ismail, a trader who runs one of the hundreds of stands in Bakara told us, ” Our cash (taxes) will go to paying for the big cars and houses of politicians”.

A large share of the $247 million budgeted for 2018 will be spent on paying the salaries of politicians, soldiers and civil servants.

However, the Minister for Finance, Abdirahman Beileh, stressed that a nation cannot function if it cannot raise money through taxes. Last week, he told reporters that every business was expected to comply if Somalia is to ever wean itself off foreign aid.

“Today 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.”

If Somalia can become self-sufficient, it may be able to receive international debt relief on the nearly $5.2 billion it owes to her creditors.

Somalia was able to generate an extra $31 million in domestic revenue in 2017. Some of the extra funds were raised by collecting taxes from airlines and major telecommunications companies.