# Taxes in Somalia: what people and businesses pay > The federal income tax rates for salaries, businesses, rent and dividends under the 2025 Income Tax Act, what each tax raised in 2022 to 2025, and Somaliland's separate rates. Source page: https://calankii.com/en/economy/taxes-in-somalia/ Last checked: 2026-11-12 Publisher: Calankii (https://calankii.com) ## The short version Somalia passed a new **Income Tax Act**, which came into force on **11 May 2025**. Its regulations were signed on 15 May 2025. It replaced the Direct Taxation Law of 1966 ([Ministry of Finance, Income Tax Manual, November 2025](https://archive.mof.gov.so/sites/default/files/Publications/Somalia%20Income%20Tax%20Manual_English%20Version.pdf)). The figures below come from the Finance Ministry's own guide to the law. The manual says that where it differs from the Act and the regulations, the law prevails. ## Tax on salaries Your employer takes the tax from your pay each month and must pay it to the Inland Revenue Department by the 15th of the next month. No costs can be deducted from a salary ([Income Tax Manual](https://archive.mof.gov.so/sites/default/files/Publications/Somalia%20Income%20Tax%20Manual_English%20Version.pdf)). | Monthly pay | Rate on that part | |---|---| | $0 to $100 | 0% | | $100 to $500 | 6% | | $500 to $1,500 | 12% | | Over $1,500 | 18% | - Non-residents pay a flat **18 percent**. - Residents under 18 years old pay a flat **20 percent**. **Worked example, using the bands above:** on a salary of $1,000 a month, the first $100 is tax-free, the next $400 is taxed at 6 percent ($24) and the last $500 at 12 percent ($60). The tax is **$84 a month**. You count as a resident if you have a permanent home in Somalia, are a citizen without a permanent home abroad, or are in Somalia for 183 days or more in 12 months ([Income Tax Manual](https://archive.mof.gov.so/sites/default/files/Publications/Somalia%20Income%20Tax%20Manual_English%20Version.pdf)). ## Tax on a business you run yourself Individuals pay tax on their **profit**, not their sales, using yearly bands: 0 percent up to $1,200, 6 percent to $6,000, 12 percent to $18,000 and 18 percent above. Every business must register on form TR1, pay in four instalments (by 31 March, 30 June, 30 September and 31 December) and file a return by **31 March** of the next year. Even a business making a loss pays a minimum tax on 5 percent of its income ([Income Tax Manual](https://archive.mof.gov.so/sites/default/files/Publications/Somalia%20Income%20Tax%20Manual_English%20Version.pdf)). ## Tax on companies For resident companies the guide lists ([Income Tax Manual](https://archive.mof.gov.so/sites/default/files/Publications/Somalia%20Income%20Tax%20Manual_English%20Version.pdf)): - sales under $10,000: a fixed **$150**; - sales of $10,000 to $50,000: **1.5 percent**; - sales over $50,000: **15 percent** of taxable profit. Non-resident companies pay a flat 18 percent. Partnerships do not pay tax themselves; each partner pays on their share. ## Taxes taken at the point of payment | Payment | Rate | |---|---| | Rent from land and buildings | 5% | | Rent from vehicles and equipment | 10% | | Dividends | 5% | | Murabaha profit and other returns on debt | 10% | | Service fees | 10% | | Royalties | 15% | | Insurance premiums | 5% | | Gains from selling property or shares | 15% | | Income of trusts (amaano) | 26% | Source: [Income Tax Manual](https://archive.mof.gov.so/sites/default/files/Publications/Somalia%20Income%20Tax%20Manual_English%20Version.pdf). The first **$100,000** of gain on selling your own main home is not taxed. The tax office's ETAS system also takes **5 percent** from businesses that receive payments into merchant mobile money accounts ([Revenue Directorate, Annual Revenue Performance 2025](https://revenuedirectorate.gov.so/sites/default/files/Annual%20Revenue%20Performance_2025_FINAL11_1.pdf)). See [Mobile money in Somalia](/en/economy/mobile-money/). ## What each tax raised Federal domestic revenue, in millions of US dollars ([Revenue Directorate, Annual Revenue Performance 2025](https://revenuedirectorate.gov.so/sites/default/files/Annual%20Revenue%20Performance_2025_FINAL11_1.pdf), Table 1.1): | | 2022 | 2023 | 2024 | 2025 | |---|---|---|---|---| | Customs | 129.9 | 171.3 | 186.0 | 175.3 | | Sales tax | 34.0 | 41.3 | 51.4 | 67.3 | | Income tax | 18.7 | 24.4 | 36.2 | 44.8 | | Fees and other non-tax income | 80.8 | 101.7 | 101.9 | 123.6 | | **Total domestic revenue** | **262.7** | **329.5** | **369.4** | **404.3** | All domestic revenue was about **3.1 percent of GDP** in 2025; income tax alone was 0.3 percent (same source). Customs fell in 2025, which the report puts down to weaker trade and the Red Sea disruption. Sales tax grew 31 percent, helped by digital collection in Mogadishu markets and taxes on airline tickets, phone services and hotels. Its listed sources in 2025 included a $3.3 million "signature bonus" and $3.98 million of urban road user taxes ([Revenue Directorate](https://revenuedirectorate.gov.so/sites/default/files/Annual%20Revenue%20Performance_2025_FINAL11_1.pdf)). In 2025 the office registered 1,700 new medium and large taxpayers and 31,000 rented properties (same source). Implementation of the new income tax law was delayed into 2026. Running the revenue office cost about **$437,000** in salaries and bonuses in 2025, plus about $500,000 for computer systems and operations ([Revenue Directorate](https://revenuedirectorate.gov.so/sites/default/files/Annual%20Revenue%20Performance_2025_FINAL11_1.pdf)). For the full budget, see [Somalia's federal budget and taxes](/en/economy/budget-and-taxes/). ## Somaliland [Somaliland](/en/states/somaliland-1991-to-2026/) sets its own taxes. Its Finance Ministry lists a **6 percent** tax on salaries, a **5 percent** goods and services tax, and 12.5 percent withholding on payments to non-residents ([Somaliland Ministry of Finance Development, tax types](https://www.slmof.org/tax-types/)). Member states such as [Puntland](/en/states/puntland/) also run their own taxes. See [How the federal member states raise and spend money](/en/economy/member-states-money/). ## Sources disagree - The 2025 revenue report gives income tax as **$44.8 million** in its table but "roughly **$38 million**" in its text ([Revenue Directorate](https://revenuedirectorate.gov.so/sites/default/files/Annual%20Revenue%20Performance_2025_FINAL11_1.pdf)). In the same table, the separate taxes add up to $14 million to $17 million more each year than the "tax revenue" total. - The Income Tax Manual's table gives **15 percent** on gains from selling property, but one of its own worked examples uses **10 percent** ([Income Tax Manual](https://archive.mof.gov.so/sites/default/files/Publications/Somalia%20Income%20Tax%20Manual_English%20Version.pdf)). - In the Income Tax Manual's own first example, a shop worker earning $1,000 a month has **$120** withheld. Using the manual's monthly bands, the tax on $1,000 is **$84** ([Income Tax Manual](https://archive.mof.gov.so/sites/default/files/Publications/Somalia%20Income%20Tax%20Manual_English%20Version.pdf)). - Somaliland's tax page gives rental income tax as 12.3 percent, but its own example uses 10 percent ([Somaliland Ministry of Finance Development](https://www.slmof.org/tax-types/)). ## Data file Federal revenue by type of tax for 2022 to 2025, in US dollars, is in [federal-domestic-revenue-by-tax-2022-2025.csv](/data/economy/federal-domestic-revenue-by-tax-2022-2025.csv). Source: [Revenue Directorate, Annual Revenue Performance 2025, Table 1.1](https://revenuedirectorate.gov.so/sites/default/files/Annual%20Revenue%20Performance_2025_FINAL11_1.pdf). --- I want to help with this: email hello@calankii.com. Fix this page: email hello@calankii.com with the page link and your source.