About The Bill

This bill establishes the framework for imposing income tax on individuals in Somalia, specifying taxable income, tax rates, and payment procedures. It aims to regulate income tax comprehensively, following rules consistent with existing revenue administration law. The bill defines important terms such as income sources, business activities, investments, assets, and taxable persons including residents and non-residents. Income tax rates for individuals are progressive: no tax on income up to $1,200 USD annually; 6% tax on income $1,201 to $6,000 USD; 12% on income $6,001 to $18,000 USD; and 18% on income exceeding $18,000 USD per year. Special rates apply for persons under 18 and for income from investment returns or trusts. The bill also establishes a simplified tax scheme for small taxpayers with lower incomes and allows for quarterly tax payments. Advantages of this bill include providing clear rules for income tax obligations, fostering fair tax behavior, and improving tax revenue for Somalia's development. It encourages compliance through transparent procedures for reporting income and paying taxes, and supports economic formalization. The bill includes provisions for calculating taxable income, allowable expenses, and exemptions to protect taxpayers.