Government not committed to legal tax framework-lawmaker

What the government is doing is just similar to what criminal networks do by imposing illegal levies at check points in some parts of the country

A lawmaker has termed the move by the government to collect sales tax at the port of entry inexcusable while equating the new tax to levies imposed by cartels manning checkpoints in parts of the country.

Former finance minister and current MP Abdullahi Nur said the government could not feign lack of capacity to collect taxes from the traders as it has been collecting other taxes regularly despite the prevailing challenges.

“The government collects $14 million monthly in Banaadir region in form of other levies. It cannot claim therefore that it does not have the capacity to send revenue staff to Bakaro market,” Nur told Goobjoog News.

Sales tax must be collected after items are sold to cushion the trader from inherent risks within the chain and double taxation especially when they are transporting their goods from say Mogadishu to HirShabelle, the lawmaker added.

NO CAPACITY

Finance Minister Abdirahman Beileh has however insisted traders must pay taxes at the sea port and airport in Mogadishu noting the government did not have the necessary infrastructure and capacity to collect the taxes at the tail end of the sale.

“We lack the capacity to put good systems across the nation. We do not have the ability to give everybody a tax identification number,’ said Beileh in a media interview. The minister also added the tax was not optional.

Traders Tuesday announced talks with the government had collapsed laying blame on the Finance Ministry for what they termed as failing to agree to an amicable solution.

LEGAL BASIS

Nur said there was no legal basis on the new 5% sales tax imposed by the government. “There is no legal basis for this kind of move. Over 80% of this tax regime is not anchored in any law,” the lawmaker said. He added that the government has only been depending on negotiations to collect taxes from the traders. “Where in the world do you collect taxes based on negotiations?”

What the government is doing is just similar to what criminal networks do by imposing illegal levies at check points in some parts of the country, the lawmaker said.

The government has intentionally snubbed calls by Parliament to table revenue bills before the House, Nur who is also a member of the Finance Committee of the Lower House said. His committee and that of trade last week termed the new taxes as illegal calling on the Finance Minister to table the revenue bills by April 30 this year.

The committees observed the government acted outside the law in violation of article 125 of the Provisional Constitution.

The article stipulates parliament shall enact a National Reserve law which shall among others ‘determine legitimate revenue collection and expenditure disbursement relating to institutions at all levels within the Federal Republic of  Somalia’.

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