Regulatory Alerts2025-08-09
Evolution of Somalia’s Fiscal Sector: Modernizing Revenue Collection and Tax Administration
The Central Bank of Somalia issued this June 2025 policy brief to outline the Federal Government’s strategy for modernizing revenue collection and tax administration, targeting a 4 percent revenue-to-GDP ratio by 2027. Recent digital reforms, including a 5 percent electronic sales tax and automated customs systems like SOMCAS, have increased domestic receipts to US$369.4 million in 2024 but left a persistent fiscal gap of over US$116 million due to high recurrent expenditures. The brief mandates broadening the tax base to include informal sectors, scaling digital administration tools such as ETAS and RITS, and harmonizing fiscal governance between federal and state authorities to achieve budgetary self-reliance.
Share