Mogadishu (PP News Desk) — The motto of the Somali Auditor General’s Office reads “Preserving Accountability for Every Somali Shilling in the Public Sector”, but this lofty statement runs counter to the mystery surrounding how locally raised tax revenues get managed and accounted for. The 2022 report from the Auditor General’s Office shows remarkable tax revenues collected locally during the 2022 fiscal year, totaling US$ 181,691,842. Non-tax cash receipts for the same fiscal year stood at US$ 80,977,903.
A substantial amount of the tax revenues comes from property tax and rental income tax in Mogadishu. An annual property tax of US$ 60 is levied on a house in Hawlwadaag, Wardhiigley (Wartanabadda) or Hodan, three districts in South Mogadishu known for prime real estate and business centres. The rental income tax is levied when a landlord rents out a room or rooms in their property. The rate is 0.05%. If the monthly rent paid by a tenant is US$ 150, the quarterly rental income tax payable on the property is $22.50. In the Auditor General’s report, property tax comes under the rubric of Recurrent tax on immovable property, which for the 2022 fiscal year amounted to US$ 631,278 compared to US$ 25,778,736 raised through general taxes on goods and services for the same fiscal year.
The receipts given to landlords and business owners bear the name of the Finance Ministry of the Federal Government of Somalia. No effort is made to validate the accuracy of the number of houses in each Mogadishu district or whether properties are classified as different bands based on the area they are located. Puntland Post reporter interviewed several landlords and business owners who complained of hardball tactics of the district authorities tasked with collecting property and sales taxes. “They text you to pay the tax due. If you are late with the payment of the tax, they send soldiers to your house and harass you and the family or the staff at the business premises” a business owner says. Last month President Hassan Sheikh Mohamud vowed his government would use the intelligence service (NISA) to enforce tax collection in Mogadishu.
No effort is made to validate the accuracy of the number of houses in each district or whether properties are classified into different bands based on their location.
The Municipality of Mogadishu does not grant districts the privilege to seek allocations to deal with infrastructural problems caused by the seasonal rain, to improve hygiene standards or to implement fire prevention measures. ‘Senior district office executives own receipt books to collect property taxes from houses that have not been disclosed to the Finance Ministry,’ said a worker in one of the South Mogadishu districts who requested anonymity. Without addressing irregularities in the tax collection records in Mogadishu Municipality and auditing procedures of the Finance Ministry, tax collected from the people of Mogadishu will resemble the extortion fees demanded by operators of illegal roadblocks (la sbarra).
© Puntland Post, 2024
