Gov’t Moves to Increase Khat Tax to 50 Percent in a bid to Curb Inflation in Somaliland

[Deeq A.]

By: Ms. Farrah Mohumed

HARGEISA–The New Somaliland gov’t has decided to increase Khat taxes by 50 percent. This tax increment is aimed at curbing the rising inflation in the country which impacted on the standard of living. The government has implemented the tax increase as Khat importers were demanded to pay the new tax. Somaliland which is not recognized country spends millions of dollars in the consumption of Khat imported from Ethiopia. Economists have pointed out Khat, a herbal stimulant which has impacted on the health of the community is also a strain to the economy. They claim that it is one of the factors that hiked the inflation which has gone out of control in Somaliland. The import duty on Khat is to become 50 % as government is determined to put the act into operational. Khat transporting vehicles began to hide from customs check points and police launched a crack down to Khat which has been sneaked into the country illegally without paying the taxes. The president, Musa Bihi stated that it has introduced tough measures aimed to reduce the skyrocketing food price and inflation which has strained the country’s economy as far as Somaliland is concerned. Although Khat community selling members would raise a concern over the tax increase but the gov’t is adamant that it won’t revoke it.