Somalia: In Baidoa, a New Income Tax Tests Public Trust in a Time of Insecurity and Joblessness
BAIDOA, Somalia— A new personal income tax in Somalia’s South West State is colliding with the hard math of life in Baidoa: few formal jobs, persistent insecurity, and threadbare public services. Authorities say the measure is essential to build a functioning state. Many residents hear it as a bill for services they cannot see.
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The policy, announced recently in Baidoa — the interim capital of South West State — applies to salaries, allowances and work-related benefits. According to officials, monthly earnings between $100 and $500 will be taxed at 6 percent; incomes from $500 to $1,500 will face 12 percent, with higher brackets above that. The pitch is civic duty and development, captured in the slogan: “Be a tax-paying citizen and contribute to your country’s development.”
On Baidoa’s streets, the reception is wary. “I don’t even have steady work,” said a young private-sector employee who earns irregular income and asked not to be named for security reasons. “They are taxing people who are already struggling, while nothing improves around us.”
A tax introduced into a weak social contract
Taxation is not only a revenue tool; it is a social contract. In places where governments can demonstrate basic returns — safety, clinics, functioning roads, predictable justice — citizens tend to comply. In Baidoa, where the state’s capacity has been hollowed by years of conflict and economic isolation, officials are demanding trust before they can show results.
The region’s vulnerabilities are well known. Roads linking Bay and Bakool have been severed or risky for more than a decade, cut off by the al-Qaida-linked militant group al-Shabab. Commerce is throttled, prices swing with supply shocks, and travel outside major towns often requires armed escorts or circuitous detours. In this context, asking households to surrender a slice of scarce income reads less like nation-building and more like extraction.
Officials counter that the circular logic is precisely the problem. Without domestic revenue, they argue, South West State will remain trapped in dependence on donors and unable to fund core services, let alone improve security. “Without revenue, there can be no services,” one local official said, defending the tax.
Legitimacy questions, accountability gaps
In Baidoa, skepticism about where the money will go is knotted up with politics. Accusations of corruption and favoritism have dogged the administration of President Abdiaziz Hassan Mohamed, widely known as Lafta-Gareen. His 2018 election was marred by violence that left dozens of civilians dead after clashes with security forces, according to rights groups. Opposition figures say his mandate expired in 2022 — a charge officials reject — casting a lingering shadow over the government’s legitimacy.
“People here call him the president who sits on a bloody chair,” said a local analyst, invoking the trauma that still defines how many residents view power in South West State.
The regional parliament, which should scrutinize taxation and spending, is seen by critics as pliant and largely inactive. That weakens one of the basic assurances citizens seek when they pay taxes: that elected representatives will oversee how funds are collected and used, and that they will demand results.
An economy ill-suited to payroll taxes
South West State’s labor market complicates enforcement. Formal jobs are scarce; many families survive on daily wages, remittances or humanitarian aid. A payroll-based income tax may capture public employees and a sliver of private staff in Baidoa and other towns while missing large swaths of the informal economy. In some cases, the burden will fall on those easiest to reach — teachers, clerks, small business staff — who often have the least bargaining power and face rising living costs.
Militant control over key corridors and the prevalence of parallel systems of extortion and “taxation” in parts of Somalia have long distorted commerce, raised transaction costs and sapped confidence. Without improvements in basic security and access, new levies risk widening the gap between what people pay and what they think they get back.
What success would require
There is a case for domestic revenue in South West State: Donor flows are volatile, and security, health and education cannot run on promises. But the sequencing matters. A tax, especially in a fragile context, needs visible returns and credible guardrails from the outset.
Several steps could help close the trust gap:
- Transparency: Publish monthly figures showing how much is collected in Baidoa and where it is spent, broken down by sector.
- Quick, visible wins: Ring-fence an initial share for highly visible services — repairing a key road segment, equipping a clinic, or improving water access — and deliver within weeks, not months.
- Protection for the poorest: Revisit thresholds, exemptions and hardship provisions to avoid taxing near-subsistence incomes, and provide clear guidance to employers and workers.
- Independent oversight: Empower an audit body and a civil society observer group to monitor collections and procurements, and to report publicly.
- Clear grievance channels: Set up complaint mechanisms so workers can contest improper deductions or irregular enforcement without fear.
- Security linkage: Tie revenue plans to specific, measurable steps to reopen key routes and improve market access, with timelines and progress updates.
These are not cosmetic fixes. They are the minimum conditions for establishing a modern fiscal relationship in a region where the state’s absence — or predation — has too often been the norm.
Political will versus public patience
The administration’s decision to impose an income tax now signals a bid to assert authority and reduce donor dependence. It also tests the limits of public patience. Many workers — including civil servants who will likely be the first and easiest to tax — feel they have already paid in other ways: through insecurity, stalled livelihoods, and years of disrupted services.
“South West State has not created jobs, reopened roads, or improved security,” said an economist from the region. “Yet it is quick to tax the little income people earn.”
That critique need not be a veto on taxation. Rather, it should be a spur to prove that the state can deliver. In a fragile environment, legitimacy does not flow from tax codes alone. It follows concrete, visible improvements, reinforced by a sense that rules apply evenly and leaders are accountable.
The bottom line
A personal income tax in Baidoa could be a milestone in building South West State’s institutions — or an expensive lesson in how not to collect revenue. The difference will hinge on whether residents see their money transform into security, access and opportunity. In a city hemmed in by roadblocks and joblessness, that is the only argument likely to persuade taxpayers that this time, paying in won’t mean losing out.
By Ali Musa
Axadle Times international–Monitoring.
