Somalia's Council of Ministers has approved a Bill that seeks to establish a National Revenue Authority (NRA), marking a major step in the country's efforts to reform its tax administration system and increase revenue collected from domestic sources.
The proposed law, which now awaits debate and approval by Parliament, would create a single institution responsible for tax collection across the country for the first time.
The draft legislation was approved during a Cabinet meeting and will be presented to MPs once Parliament reconvenes. If Parliament passes the Bill and it becomes law, the National Revenue Authority will become Somalia's main institution for collecting domestic revenue, replacing the current system in which tax administration is handled through different structures at various levels of government.
According to the government, the new authority is intended to bring order and consistency to tax collection by ending the fragmented system that has existed for many years. At present, tax administration is carried out through separate mechanisms involving the Federal Government, Federal Member States and local authorities, creating differences in how taxes are collected and managed across the country.
Under the proposed law, the National Revenue Authority will serve as a single central agency responsible for administering domestic taxes. The authority will also coordinate tax collection between the Federal Government, Federal Member States and local administrations in an effort to improve cooperation and reduce gaps in revenue administration.
Government officials say the legislation provides the legal and institutional framework needed to implement tax administration under Somalia's newly adopted Constitution. The Constitution defines the revenue-raising responsibilities of different levels of government, and the proposed authority is expected to put those constitutional provisions into practice through a single system that supports coordination and compliance.
The Ministry of Finance has also announced plans to introduce digital systems once the authority is established. Officials say the digital platform will make it easier to monitor tax compliance, improve record-keeping and strengthen enforcement measures. The ministry believes the system will also improve accountability, enhance taxpayer services and provide better oversight of revenue collection across the country.
Finance Minister Bihi Iman Egeh said the creation of the National Revenue Authority forms part of the government's wider efforts to strengthen public finances by increasing money raised within the country. He said the government wants to build a revenue administration that is transparent, efficient and accountable while reducing reliance on financial support from international partners.
Iman confirmed that the Council of Ministers has already approved the draft legislation and said it will be submitted to Parliament after lawmakers return from recess. He said that if Parliament approves the bill, the National Revenue Authority will become the country's central institution responsible for collecting domestic revenue and managing tax administration.
The proposed reforms come as Somalia continues implementing economic and financial changes aimed at strengthening state institutions and improving the management of public resources. Increasing domestic revenue has remained one of the government's priorities as it seeks to finance public services using locally generated income rather than depending on external assistance.
Government officials believe a unified revenue authority will also make it easier to enforce tax laws, improve coordination between different levels of government and create a more predictable system for taxpayers. They say the reforms are expected to support public finance management by ensuring that tax collection is carried out under one institution with clear responsibilities and national oversight.
Parliament is expected to review the Bill when it resumes its sessions. MPs will debate the proposed legislation before deciding whether to approve it.
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