Mogadishu(Mogadishu24)-Major parts of Bakara Market, Somalia’s largest marketplace, were shut down today as traders went on strike to protest the newly imposed 5% tax on goods and services. The strike, which also affected other key markets in the capital, was in response to the government’s insistence on collecting digital taxes on merchants and mobile money transactions, set to take effect today.

Government and Parliamentary Reactions

Somalia’s Minister of Finance, Bihi Egeh, defended the tax as necessary and legitimate, despite widespread complaints from business owners and criticism from members of the federal Parliament. MP Mohamed Hassan Mohamed ‘Murjan’ openly encouraged residents to refuse paying the tax until a parliamentary decree defines its implementation. Other parliamentarians, including Abdirahman Abdishakur Warsame, also opposed the tax, describing it as illegal since it had not passed through the parliament.

President’s Warning and Business Community’s Concerns

President Hassan Sheikh Mohamud warned traders against refusing the tax, arguing that it is one of the lowest in the region, citing Kenya as an example. He acknowledged receiving complaints from business leaders and stated that resolving the issue would require collaboration across multiple government institutions, not just the Ministry of Finance.

The new value-added tax comes just days after tuk-tuk drivers in Mogadishu protested against high taxes, fines, and license fees exceeding $300. Additionally, private hospitals in Mogadishu have rejected the taxes imposed on them by the government.

Ongoing Tensions

Despite the strikes, protests, and widespread dissatisfaction from various sectors, the government is pushing forward with the implementation of the tax, signaling ongoing tensions between the administration and the business community in Mogadishu.