Regulatory Alerts2025-09-01
Evolution of Somalia’s Fiscal Sector: Modernizing Revenue Collection and Tax Administration
The Central Bank of Somalia issued this policy brief to analyze the nation’s ongoing fiscal modernization, highlighting a persistent 3.0 percent revenue-to-GDP ratio and an annual $116 million fiscal gap between domestic collections and operational expenditures. It outlines three strategic imperatives: enforcing the new Income Tax Law and expanding the tax net to informal sectors, scaling digital administration tools like ETAS and SOMCAS to automate compliance, and harmonizing federal-fiscal governance to establish a unified revenue authority. Implementing these measures through the 2025–2027 Medium-Term Revenue Roadmap will enable the government to fully finance its operating expenses from domestic resources and reach a targeted 4 percent revenue-to-GDP ratio by 2027.