Mogadishu Markets to Close in Protest Against New VAT

The business community in the Benadir region has announced the closure of markets across Mogadishu on Sunday, August 18th, in protest against the Somali government’s newly introduced Value Added Tax (VAT). The tax, which imposes a 5% levy on electronic payments made through licensed merchant transactions, is set to take effect the same day.

The decision to close the markets was made in response to growing dissatisfaction among merchants, who argue that the new VAT could negatively impact their businesses and the overall economy. The protest is expected to affect commerce throughout the capital, with many businesses planning to keep their doors shut in solidarity against the tax.

On Saturday evening, President Hassan Sheikh Mohamud addressed the nation, urging the public to support the VAT initiative. He emphasized that the 5% tax is crucial for Somalia’s journey towards financial independence, as it will generate revenue necessary to fund security, public services, and other essential government functions. The President assured that the VAT applies only to licensed merchant transactions and does not affect personal mobile money payments.
He called on both merchants and consumers to comply with the new regulation, underscoring the importance of tax contributions in building a stable and prosperous Somalia.

The business community’s decision to protest highlights growing tensions between the government and merchants over the implementation of the digitalized VAT, which they fear could negatively impact their operations