Mogadishu (UM) – In a joint statement between the Parliamentary Committees of Finance and Commerce, the Ministry of Finance’s 5% Sales Tax collected at Mogadishu Port was deemed illegal. This sensational judgement comes at a critical time in which the Federal Government and some of the business community are still debating the tax while others are paying it to release their goods from Mogadishu Port.
The joint Committee statement is unusual because it attempts to nullify a government decision based on Tax laws which exists from the period of President Siad Barre. According to the Ministry of Finance the law which Governs Sales Tax is Law No. 2 which was signed into law 7th January 1984. In any legal system, even in fragile states like Somalia which have experienced painful destruction, the laws remain the same until they are either amended or nullified by Parliament. However, Somali Parliamentarians have got used to shouting “illegal” at anything that they do not understand without legal consultation. This is unconstitutional, immature and destabilising for Somalia’s development.
The Joint Committee statement asserts that Article 125 of the Provisional Constitution provides Parliament a mandate to vote on all new taxes in the country. However, Article 125 concerns the “Establishment of a National Reserve.” The Provisional Constitution does not say that all laws before the Provisional Constitution, which reads like a UN Charter in its pointless perfection, are null and void. Moreover, the provisional constitution does not provide any Committee the right to nullify law, it merely allows it to scrutinise laws and provide recommendations to Parliament. This is in line with global Parliamentary practice in democratic countries. Given that MP’s benefit from capacity building support to know their jobs, the Committee Members ought to have known this.
The issue of the 5% Sales Tax is one that has generated passionate discussions and will need further work to convince the public to pay from the Ministry of Finance. However, the argument that Somalis must pay taxes and finance their future is one that Parliamentary Committees of MP’s who are paid through public taxes should support and not undermine. In any case, the Joint Committee should have sought legal advice before releasing the damaging statement with a decision they are legally not allowed to make by the Provisional Constitution they wrongly relied on.
The Joint Parliamentary Committee potentially has a credibility issue as many of their members are strongly linked to private enterprises and the business community for whom they came out strongly in their statement. Some are also opposition to the Government. As a result, there is a public perception that the Joint Committee is acting in its own interest in protecting the business community over advancing the Government’s agenda of financing Somalia’s future. Yet, these MP’s are all waiting for a salary from the Government at the end of the month.
There is no doubt that taxes in Somalia are a contentious issue. The Somali Federal Government must win trust and public support through transparency and accountability. Tax institutions must be strengthened, and revenues collected must be invested in public services for the common good. However, the overwhelming public opinion is that private interests of a few must not override the national development agenda of the Somali nation and its people. Somalia cannot continue to beg other nations for their citizens taxes to rebuild. This is an insult to the pride of the Somali people and a nuisance to aid fatigued partners who are witnesses to Somalia’s economic potential.
A better use of Parliament’s time and that of the Joint Committee of Finance and Commerce is to investigate which of their members own or have shares in what companies and make this public so that their deliberations and decision making can be trusted. More importantly, all MP’s should question the Parliamentary Committee on Finance, rather than congratulating them, on why they are paying 8% income tax on over $3,000 salaries with extra $1,000 plus added for security while Director Generals at Government Ministries on just over $1,000 are paying 12% and other earning over $1,500 are paying 18%. Accountability must start with Parliament.