In Somalia, dozens of shopkeepers demonstrated on Monday August 19 for the second day running in the capital Mogadishu’s main market against the application of a flat-rate VAT of 5% on electronic means of payment, notably by cell phone.
According to the government, Sunday’s introduction of the tax is intended to generate revenue to fund infrastructure and security in the country, which has been battling the radical Islamist Shebab insurgency for over 15 years.
Tradesmen are denouncing a new burden on top of the customs duties they pay to import goods and the informal taxes they have to pay to conduct their business.
“We’re not against the tax, but we need a proper system and to stop the illegal extortion of money from traders before submitting to government instructions”, Suleyman Adan, one of the Bakara market traders, told said.
This anger was echoed in parliament, where elected representatives debated the subject on Monday.
“Tradesmen are already heavily taxed, imposing more taxes without any guidelines is not fair,” said MP Yusuf Gamadid.
The Minister of Finance, Bihi Amin Ige, pleaded incomprehension over this “transparent tax”, based on a text dating back to 1984.
The protests follow earlier ones last week by tuk-tuk drivers in the capital, who clashed with security forces after a proposed increase in license fees.