Tax & Tariffs in Somaliland
Tariffs for multi professional services licenses:
The current Tariffs for Taxes and Licenses in Somaliland are based on the presidential decree number J.S.L/M/XERM/249-2172/112013 dated on 24/11/2013 and law No. 0369/112013 announcing the enforcement of the amendment of the tariffs for taxes and licenses and the letter of the House of Representatives of the Republic of Somaliland Reference No. GW/ WAK/04/147/2013 of 24/11/2013 as the amendment approved. The Ministry of Finance officially circulated a decree to enact this law being as follows:
| No | Category One | Local Applicant Tax | Foreign & Joint Venture Tax | ||
| 1 | Auditing firm
Accounting firm Sales and marketing firm Economic firm ICT firm Logistics and procurement |
Sole proprietor | $157 | Sole proprietor | $1,046 |
| Partnership | $523 | Partnership | $2,091 | ||
| 2 | Category Two | Local Applicant Tax | Foreign & Joint Venture Tax | ||
| Media firm
Engineering consultancy Laundry firm Beauty salon Advertisement firm |
Sole proprietor | $314 | $1,086 | ||
| Partnership | $523 | $3,137 | |||
| 3 | Category Three | Local Applicant Tax | Foreign & Joint Venture Tax | ||
| Monitoring & Evaluation firm
Environmental assessment firm Fund management firm Commission agency Monitoring & Evaluation Firm Environmental Assessment firm Fund Management Laboratory Firm Sanitation firm Traveling and Tourism firm Classic Tourism HoTells firm Archeology firm Social and Security Company Commission agency |
Sole proprietor | $523 | Sole proprietor | $1,568 | |
| Partnership | $836 | Partnership | $3,137 | ||
ALSO, according to the directive of the Ministry of Finance Development of the Republic of Somaliland referred to as WM/02/08-01/1228/2016 dated on December 26, 2017, and amendments made to the Tax Tariffs 2017, listed below are the current Somaliland tariffs regulated by the Ministry of Finance Development.
| Local | Foreign & Joint Venture | |||
| Type of Service License | Sole prop. | Partnership | Partnership | Sole prop. |
| Printing Service | $150 | $300 | $1,000 | $2,000 |
| Publishing Service | $150 | $300 | $1,000 | $2,000 |
| University Educational Service | $400 | $500 | $4,000 | $5,000 |
| Secondary Educational Service | $300 | $400 | $3,000 | $4,000 |
| Elementary Education Service | $100 | $200 | $500 | $1,000 |
| Intermediate Education Service | $200 | $300 | $2,500 | $3,000 |
| Chemical Control Management | $150 | $300 | $1,000 | $2,000 |
| Water Service | $150 | $300 | $1,000 | $2,000 |
| Electricity Service | $150 | $300 | $1,000 | $2,000 |
| Clinical Service | $150 | $300 | $1,000 | $2,000 |
| Marine Survey Service | $200 | $400 | $2,500 | $3,000 |
| Shipping Maintenance | $200 | $400 | $2,500 | $3,000 |
| Oil and Gas | $500 | $1,000 | $2,000 | $3,000 |
| Clearance & Forwarding | $500 | $500 | – | – |
Tariffs for licenses of import, export, construction contractors, and other businesses:
| Import & Export License | 6,000,000 SL Shillings |
| Export license | 2,000,000 SL Shillings |
| Import license | 4,000,000 SL Shillings |
| Construction license A | 3,000,000 SL Shillings |
| Construction license B | 2, 000,000 SL Shillings |
| Construction License C | 1,500,000 SL Shillings |
| Vehicle sales/rent | 2,000,000 SL Shillings |
Other Common Tariffs & Taxes rates in Somaliland:
- Houses rent tax 14%
- Vehicle transfers tax $55 or $105
- Land transfers tax 4%
- Vehicle rent tax 18%
- Vehicle registration tax 5%
- Administration tax 2%
- Stamp duty tax 1%
- Sales tax 5%
- Payroll tax (Income tax + stamp duty) 6%
- Property transfers tax 4%
- Contracts of firms 7%
- Payroll tax (Income tax + stamp duty) 6%
Employment income (Payroll tax) is taxed at 6% of the gross annual income which is equivalent to personal income tax (6% of the total income an employee earns). The most tax evasions happens in such sources especially in the private employers besides also property transfers, rental tax etc, while at the same time many of the new entrepreneurs may not be aware of this obligatory tax for the first years of their business establishments. All the private employers are obliged to abide by the law by ensuring deduction of payroll tax from their employees’ salaries/wages on monthly basis, and deposit it to the Inland Revenue Department of the Ministry of Finance Development.
Grades of taxes levied by Local Governments in Somaliland:
When you want to establish and open new business in Somaliland, the respective Local Government/Municipality will visit you upon your request for registration. They will assess the scale of your business and decide which of the below 7 Categories your business matches:
- Category 1: SL SH 2,800,000
- Category 2: SL SH 2,540,000
- Category 3: SL SH 770,000
- Category 4: SL SH 550,000
- Category 5: SL SH 360,000
- Category 6: SL SH 230,000
- Category 7: SL SH 215,000
In addition, the daily collection of one thousand Somaliland shillings is done by the Local Government from the small business vendors that are not officially established businesses with permanent places.
NOTE: you should know that the municipal level business registration is not conditional to obtaining your business license from the Ministry of Commerce, and the later starts from official opening of the business place. Henceforth, you need to contact the Local Government, and get registered as soon as you open the door of your new business before Municipal Officer with policemen finds you unregistered.
Tariffs and procedure for water system installation (Utilities services):
Tariffs vary as follows:-
- Upstairs building = SL Shillings 15,000,000
- HoTell = SL Shillings 10,000,000
- Residential house (80×80) = SL Shillings 10,000,000
- Residential house (40×60, 80×60) = SL Shillings 6,000,000
- Small/medium business places (i.e. pharmacies) = SL Shillings 6,000,000
- Temporary residential house (Sandaqad) = SL Shillings 6,000,000
- Application letter to Hargeisa Water Agency for water service installation stating the location and type of your building such as residential house, business etc;
- First, get ticket revenue attached to it from the Inland Review Department (Waaxda Cashuuraha Barriga), paying SL Shillings 20,000 or $2, then submit to the Water Agency;
- A plumber will follow you to assess suitability of the place – type of the building, width, accessibility of piped water in the area, the land spot;
- Type and length (Meters) of the pipe, applicable to it
- You will be responsible for buying the suggested type and length of the pipe required, and the meter flow (Saacadda biyaha);
- NOTE: if the water pipe is passing beneath a road, you will need to get permission from the Local Government, and pay lumpsum charges of about $500;
- The water bill is paid at the end of each month upon the bill invoice delivered to the house. Failure to pay the due bill within seven days after the bill is issued to you, will result cut of water from the house, and charges of fine of 25%,;
- NOTE: rate of the water price is SL Shillings 9,975 per cubic meter (= 5 barrels);
Contact 063 4424700 for Water Distribution, and 063 4485281 / 4035059 for repairing damages to water pipes.