Somalia VAT
Calculator 2026

Somalia does not currently operate a comprehensive Value Added Tax (VAT) system. The country applies a sales tax at a rate of approximately 5% on certain goods and services, primarily collected in more stable areas including Mogadishu and other major urban centers. Somalia's tax system has been severely impacted by decades of civil conflict and state fragility. Revenue collection remains limited, with customs duties at ports being the primary source of government revenue. The Federal Government of Somalia has been working to rebuild fiscal institutions with support from the International Monetary Fund (IMF) and World Bank. The sales tax is administered by the Ministry of Finance and local authorities. Registration and compliance are limited due to the informal nature of much of the economy and security challenges. There is no formal input tax credit mechanism. Somaliland, which operates as a de facto independent territory, has its own separate tax arrangements including a sales tax. The federal government has expressed interest in eventually introducing a formal VAT system as part of broader state-building and fiscal reform efforts, but this depends on continued improvements in governance, security, and institutional capacity. International partners continue to provide technical assistance for tax administration development.