The self-declared Republic of Somaliland has officially enacted a sales tax, marking a significant move to strengthen its economic structure. This new measure, expected to impact businesses, corporations, and consumers across the region, was ratified during an extraordinary session of the Cabinet of Ministers.

Directly collected into Somaliland’s treasury, the approved sales tax ensures a more structured financial system to support ongoing and future development projects. It applies to all transactions made using modern payment systems, including mobile money, mobile banking applications, and other digital financial services. Additionally, utilities and internet service providers will be required to comply with this new taxation framework.

Mobile money, a pivotal component of Somaliland’s digital economy, has shown remarkable growth over the years. In Somalia, mobile money services are used by approximately 73% of the population, facilitating daily transactions that surpass the total volume of transactions handled in traditional banks. This extensive usage highlights the critical role of digital financial services in the region’s economy. The introduction of a sales tax on these transactions is expected to significantly increase state revenues, which can be channeled into further economic development and public services.

The President has designated specific members from the Cabinet of Ministers to oversee the smooth implementation of this tax. The responsible ministers include the Minister of Finance and Economic Development, the Minister of Telecommunication and Technology, the Minister of the Presidency, the Minister of Aviation and Airports Development, and the Minister of Energy and Minerals.

This initiative represents a crucial step in advancing Somaliland’s financial policies and aims to support the economic stability of the region. By instituting the sales tax, the government of Somaliland intends to generate additional revenue that will fund public services and infrastructure developments, ultimately fostering a more robust economic environment.