Every Somaliland businessman or businesswoman is expected to pay their local and national taxes. From the small shopkeeper in Baki to the bus driver in Erigavo, to the grocer in Burao, to the restaurant owner in Hargeisa are expected, and do regularly pay their taxes to both the local municipality and the central government, but Somaliland’s rich and powerful companies do not pay their fair share of taxes. This is scandalous! In a recent article in the Haatuf newspapers, companies like Somtel and Dahabshiil to mention just two of them, allegedly recorded huge profits, and paid a minimum amount of taxes. Haatuf reported that some companies allegedly paid just $20,000 in taxes whilst reporting profits in the millions.
According to Haatuf, Somtel reported a profit of $48 million US Dollars. Somaliland’s annual budget is just a little more than $60 million US! so what do we have here a government within a government?
There is nothing wrong with the free market system in general, and Somalilanders are by nature entrepreneurial and business orientated, but when major Somaliland companies make substantial profits and refuse to invest in the nation by paying their fare share of taxes, it is wrong.
These major companies cannot hide behind the fact that they donate to charities, and help to fund some local projects, and hold car lotteries, which they should be commended for, but, frankly, these are purely a public relations exercise and nothing more.
The people of Somaliland need to hold these companies accountable; after all, they are the customers for these companies. Their money goes into the coffers of these companies for services provided, but, in turn these companies should be paying some kind of appropriate taxes to the government, which in turn, should use the money to provide more public services such as health, education, employment, etc.
These companies cannot just keep taking from their customers, without reinvesting in the country and its people through the payment of decent taxes.
The Somaliland community across the world have contributed mightily to the development of the country. They send remit their hard earned money back to Somaliland, and at the same time pay their taxes in the country in which they currently live.
Is it not ironic the some of the companies who are making huge profits in facilitating the transfer of remittances are paying pittance in taxes in Somaliland, and in the case of some them are willing to pay taxes in every country except Somaliland!
Somaliland is a de-facto state, but not yet a de-jure state, which means that Somaliland cannot go into bilateral agreements with other nations, obtain loans, and so on. Yet, the nation has survived and thrived by being fiscally responsible, by making things last, by being self-sufficient. But, if our own rich and powerful companies will not pay their fare share of taxes, how will the international community take us seriously?
The defunct Somali Republic’s failures were many, a major failure was the lack of fidelity to the country shown by its wealthy citizens and companies, who hoarded their money overseas, refused to pay their taxes, bled the country dry and then fell on each other with savagery after the international community refused to subsidies their gravy train.
Somaliland cannot and will not go down that road. It is up to the Somaliland legislature to take action against these companies unwilling or under paying their taxes and it is up to the Somaliland government to implement these laws.
Recently, the Somaliland ministry of finance submitted the 2010 budget to the House of Representatives, the paltry amount paid in taxes by Somaliland’s major companies was an insult to the people of Somaliland.
There is an election coming, and not a single party has taking on the issue of tax dodging in Somaliland by these large companies. Are the politicians afraid? Do they fear to take on these companies? Human nature being what it is; the answer has to be, yes.
It is up to the people of Somaliland to take matters into their own hands, to demand that these companies contribute their fare share to taxes to the nation’s budget.
The current situation is untenable, and if the Somalilanders strayed from their path of self help and self accountable, then it is back to square one.
By Ahmed Kheyre