By Asma Abdullahi - Reporter
Mogadishu (Dawan Africa) Somalia’s domestic revenue rose by 9.4% to $404.31 million in 2025 from $369.35 million in 2024, according to an annual report from the Finance Ministry.
The government collected an additional $35 million from 2024 due to an expanded tax base, improved compliance, and digital revenue systems, the ministry said.
In recent years, Somalia’s domestic revenue has shown steady growth. In 2022, domestic revenue stood at $262.67 million; in 2023, it reached $329.49 million; in 2024, it increased to $369.35 million; and in 2025, it rose further to $404.31 million. This shows that government revenue has gradually increased over the past four years.
Tax revenue reached $280.68 million in 2025, up from $267.45 million in 2024. Non-tax revenue also recorded a notable increase, rising to $123.63 million, compared with $101.90 million in 2024.
One of the key drivers of growth was sales tax, which increased from $51.42 million in 2024 to $67.25 million in 2025. The report said the rise in sales tax was supported by stronger collections from imported goods, business services, telecommunications, hotel services, and the ETAS system, which applies a 5% deduction on merchant mobile money accounts.
However, customs revenue declined in 2025, falling to $175.26 million, compared with $186.02 million in 2024. The report linked the decline to weaker trade flows due to disruption in global supply chain.
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The ministry also reported that 1,700 medium and large taxpayers, 31,000 rental properties, and 3,000 vehicles were registered in 2025 as part of efforts to expand the tax base, particularly in Mogadishu.
On tax investigations, the Revenue Directorate handled 27 cases including health, hospitality, petroleum, small retail businesses, legal services, manufacturing, and other service sectors. Of these, 14 cases were concluded, while 2 cases were referred for legal action.
The government said that in 2026 it will focus on implementing the new ITAS system, expanding the non-tax revenue portal, strengthening SOMCAS, enforcing the new income tax framework, and increasing taxpayer awareness.
The report also identified several challenges, including delays in implementing the new income tax law, reduced revenue linked to donor-funded projects, Red Sea disruptions, and low taxpayer compliance.
The report shows revenue is still growing, but the government still faces challenges expanding tax compliance and reducing evasion to expand public services and maintain fiscal stability.