Thursday 22, August 2024 {HMC} The Somali Federal Government has recently mandated that all revenue collection be consolidated under the Ministry of Finance using the Single Treasury Account (TSA).
This directive designates the Ministry of Finance as the sole authority responsible for handling, monitoring, and collecting all forms of federal revenue, including taxes, fees, and fines.
“The centralization of revenue collection under the Single Treasury Account (TSA) is critical to enhancing transparency and accountability across all government financial operations,” stated a release from the Office of the Prime Minister.
The directive explicitly prohibits other governmental agencies, both civilian and military, from engaging in any form of revenue collection or management.
Additionally, the Minister of Finance has been granted the authority to adjust and establish tariffs and fees related to government revenue.
The directive also emphasized that all economic contracts must comply with the 2019 Public Financial Management Law and the 2016 National Procurement Law. The Prime Minister has instructed the Ministry of Finance to review all international agreements to ensure compliance and avoid legal penalties.
To improve operational efficiency at the Port of Mogadishu, the government has introduced a 50% reduction in scanning fees for goods entering the port. A standardized fee of $40 for the Port Access Permit has been established, with a cap of $110 to prevent excessive charges.
“Strict adherence to these regulations is crucial for ensuring that the intended improvements in transparency and accountability are realized,” the statement read.
The decision to centralize revenue collection comes amid broader economic reforms, including the recent implementation of a 5% sales tax, which has sparked widespread protests and resistance from some regional administrations. Notably, the new tax has faced significant opposition in regions like Jubbaland, where local officials have rejected the federal tax scheme and urged businesses to continue operating under regional tax laws.
Despite this resistance, the Federation of Somali Trade Unions (FESTU), representing over 173,000 workers, has voiced strong support for the federal government’s efforts to enhance fiscal transparency. FESTU praised the move as a necessary step toward modernizing Somalia’s tax system and ensuring that public funds are used effectively for national development.
