Ethiopian revenue in fruitful engagement with Somaliland counterparts

By M.A. Egge

The Ministry of Revenue of Ethiopia said that they had fruitful meetings with a delegation from the Ministry of Finance of Somaliland and exchanged their notes on their experiences.

A delegation from Somaliland’s Ministry of Finance went on an aptitude exchange trip to Addis Ababa, the capital of our neighboring country, Ethiopia, on May 30, 2023.

The members of the delegation included officials and employees of the Departments of Taxes-Foreign and Technology (IT & FMIS) and led by the director of income tax Mr. Mohamed Ibrahim Batuun.

The purpose of their trip was to learn more on the workings of the internal tax management system of the Ministry of Revenue of Ethiopia, especially as concerns the indirect taxation on the sales of services and goods, an implementation of which is new in Somaliland.

Somaliland Financial Development ministry has good relations with its counterparts in African countries when it comes to the exchange of knowledge and experience sharing in financial management activities.

It is worth noting that on August 8, 2022, a high-level delegation from the Republic of Sierra-Leon, which is located in the west of the African continent, arrived in Somaliland on an educational trip.

It was led by the senior deputy secretary of Sierra-Leonean finance ministry who doubles as public budget chairman Mr. Samuel E. B. Momoh who have also been involved in various sectors of the country’s finance.

He led a 14-person team whose purpose in their trip was to learn about the use of the IFMIS {Financial Management Information System} system, whose implementation Somaliland is proud of since now all the institutions of the government use the system in its financial deliberations.

During their study tour, they had meetings with various Departments of the Ministry of Finance and other stakeholders for the implementation and use of the automated process of Financial Management Information System (FMIS). They had also gone on business trips related to the purpose of their trip to Berbera city, where they had a meeting with the Local Government officials of Berbera District, one of the areas where the new IFMIS process has been implemented.

The ministry started the use and implementation of the sales tax machine for services and goods in late 2021 in order to obtain a secure tax account, especially for sales made by hotels. Also included in the project is the implementation of a sales tax on the sale of telecommunication services, electricity and the sale of manufactured goods manufactured in the country.

For the first time in hotels, a sales tax machine known as EFD (Electronic Fiscal Device) was installed, which produces an invoice with the tax due on the sales made by the hotel, which is 5% lower than the amount charged by many countries in the Horn and East Africa.

The first phase of the project was started in the city of Hargeisa, the capital of the country, and the next phase was extended to the big hotels in other cities of the country.

The purpose of the trip to the Ministry of Finance in Ethiopia is to increase knowledge related to the implementation of the GST, especially the tax on the sale of telecommunication services, electricity, hotels and the sale of goods manufactured in the country.

This project, which has recently been carried out by the Ministry, is jointly implemented by the Departments of Inland Revenue, Laws, Public relations, IT-GA, Administration and Finance, Internal Investigation and also the Tax Guard.