The Minister of Finance of the federal Government of Somalia Biihi Imaan Egeh, issued a stern warning to business owners avoiding the use of official tax collection accounts.
Egeh noted that certain businesses collect taxes from consumers but fail to report these in their sales, diverting funds away from the designated tax collection accounts.
This circumvention, according to Egeh, prevents the Ministry of Finance from collecting due taxes, also known as FAT (Federal Added Tax).
The minister highlighted ongoing investigations targeting these non-compliant businesses, which he said had disregarded mandates set by the Ministry of Finance of the federal government of Somalia.
“Any individual or business that diverts from using tax collection accounts will face legal action,” said Minister Egeh, emphasizing that the educational period for businesses to adjust to the requirement has concluded.
“From now on, there will be accountability as Some businesses collect taxes from customers but fail to deposit them into tax collection accounts.” He added
In a recent measure, the Ministry of Finance introduced a 5% tax on sales transactions, with consumers now expected to contribute this amount at the point of purchase.
This means that for every $100 spent, $5 will go to the government. The initiative is part of the government’s broader effort to enhance revenue collection and improve transparency in tax practices across the country.
