Somali workers angry with favorable tax deal for MPs -UM

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Mogadishu (UM) – Somali workers interviewed by UM in Mogadishu yesterday expressed outrage that Parliamentarians were in some cases paying less taxes than them in a deal with the Ministry of Finance.

Under Somali Tax Laws all workers must pay taxes with the exception of those earning less than $200 a month. The legal rates state that any person earning more than $1500 must pay 18% income tax but MPs who take home $3000 a month salary and over $1000 allowance for security only pay 8% tax. This deal was secured by the Parliamentary Finance Committee from the Ministry of Finance during the Midterm Budgetary review in 2017.

“This is very unfair because the Finance Committee used its powers to get a tax break for MPs who are already earning too much,” said Asha Abdi, a shop owner in Howlwadaag district.

“MPs are not leading by example because they are only working for themselves. They must pay fair amount of taxes like all of us,” said a Somali NGO worker who with a salary of just over $1800 will be paying the maximum rate of 18%. “I am very angry I am paying more than MP’s who are richer and more powerful than me and working for themselves instead of me whose taxes pay them.”

MPs which UM spoke to on the condition of anonymity acknowledged the public anger but claimed they are expected to pay for hotels, support poor relatives and contribute to other constituency matters like funerals. However, they understood that the favorable tax treatment was unfair.

“If we paid the full 18% income tax, we would be in a difficult financial position and unable to survive in Mogadishu given the commitments we have,” said one MP who spoke on the condition of anonymity. “If we pay the full amount of income tax, MP’s need housing support to add to the security support.”

Critics of the favorable tax treatment of MPs said they did not sympathize with the MP’s situation and encouraged them to pay the full amount on their salaries.

“All MPs knew what the job was before they became MPs and many of them are also businessmen. They need to pay their taxes just like me,” said an angry Mohamed Elmi who is studying business at a university in Mogadishu.

“Supporting relatives, security and hotels are private matters that MPs must pay for because we also do the same. This is not an excuse to get away with paying less than the public,” added another student of accounting who did not want to be named.

Somali income tax rates

Salary ($) Tax (%)
0-200 No tax
201-800 6
801-1500 12
Above 1501 18%

 

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