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:

  1. Category 1: SL SH 2,800,000
  2. Category 2: SL SH 2,540,000
  3. Category 3: SL SH 770,000
  4. Category 4: SL SH 550,000
  5. Category 5: SL SH 360,000
  6. Category 6: SL SH 230,000
  7. 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.

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