End for tax-free businesses … in Somalia

Published on IOL.co.za, by Guled Mohamed, June 19 2007.

Years of tax-free business that have turned anarchic Somalia into a surprising hub of free-market enterprise may be coming to an end as the government targets the lucrative telecommunications trade.

Despite violence and disease that have killed thousands since 1991 when warlords toppled dictator Mohamed Siad Barre, business in Somalia has thrived …

… “The business is profitable but comes with its risks,” Abdullahi told Reuters. “We are not used to paying taxes since they were zero regulations before this government came.”

Gunbattles frequently destroy the company’s expensive equipment, he said.

Speaking minutes after pulling a new phone line to a client, one Nation Link technician who declined to be named said the taxes should be based on how much a company earns.

“I don’t think we even make that much money,” he said, shaking his head. “We are ready to pay taxes but I think that’s too much. The government should state a reasonable fee.” – Reuters. (full text).

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