Monday October 28, 2019
MOGADISHU (HOL) - Somali President Mohamed Farmaajo Sunday signed into law the National Revenue Act marking a major milestone for the Horn of Africa nation in its bid to secure debt cancellation and spur economic growth.
Farmaajo who termed the law a key piece of legislation in modernising tax collection and use hailed Parliament and all stakeholders who were involved in the process of developing the law.“This law is about revenue management and it is a law that is consistent with the modern revenue collection system. The provisions of this law are the most important in paying taxes and in dealing with the taxpayer,” the head of state said.
The legislation which now updates revenue laws which date back to the 1960s is expected to help the government in expanding revenue collection and increasing domestic financing of the national budget which is currently funded to about 50% by international donors.
Speaking during the debate and passage of the Bill in the Upper House last week, Finance Minister Abdirahman Beyle said the law will be crucial in reforming the revenue regime in the country in boosting domestic revenues.
“This Bill will support the economic reform efforts by giving direction to national revenue collection and management.
Domestic revenue mobilisation is crucial for our future a priority,” the finance minister said.
The World Bank urged Somali in its second Economic Update in 2017 to institute reforms in revenue collection and use to boost local financing of the national budget and widen the tax bracket.
“Building capacity to raise revenue through taxes is particularly crucial, because it reduces dependence on aid, helps finance service delivery, strengthens the contract between the state and its citizens, and fortifies intra-society relationships,” the global lender said.