MOGADISHU (SD)-The Federal Government of Somalia has announced that starting Sunday, August 18, 2024, it will begin collecting a 5% sales tax directly. The government stated that this tax would be deducted from business accounts at the point of sale, where the customer will pay for the service or product purchased. The sales tax will then be directly deposited into the government’s central treasury.

The Ministry of Finance also emphasized that these taxes would be automatically deducted and deposited into the central government’s account. This announcement comes just days after a meeting between the business community in the capital and the Minister of Finance ended without agreement regarding the implementation of the sales tax.

This move comes at a time when the government and the business community have yet to reach a consensus on the method of collecting this tax from customers, which has also posed additional challenges for the residents of the capital who do not currently receive government services.