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Somaliland Public Finance Law

Somaliland Public Finance Laws

Constitutional provisions on budgeting and public finance: Articles 54 & 55

Main Public Finance Laws

The main law & regulations governing public finances are, subject to the  changes brought about by the later constitutional provisions, the the following 1996 laws:

 Both the Law and the Regulations are an exact reproduction of the law and regulations with the same name passed in the Somali Republic in 1962, but should of course now be read with the provisions of the Somali Constitution. For an examination of how the budget controversies between the President and the House of Representatives were partly clouded by the interaction between these old laws and the constitution, see  this extract of an article by the editor. 

Somaliland Office of the Auditor General Law (Law No. 7/99)

 Law No. 7/99 (Xeerka Hay’ada Hantidhawrka Guud - Xeer Lr. 7/99) came into force on 6 January 1999 on its signature by the President. The Law consists of the following 25 Articles:

    Presidential Decree, HoR Resolution


    Articles 1 - 11


    (in Somali)

    Articles 12 - 19


    Articles 20 -25






The Auditor General is one of the special offices of state mentioned in the Constitution (Article 113) and the independence of his office and his immunities are guaranteed in Articles 1, 10 and 23 of this Law. Under Article 20 and 21 of the Law, the Auditor General (and his office) may pass on to the Attorney General for prosecution any information and evidence indicating an the commission of an offence against the public finance laws.  If when undertaking audits, the Auditor General’s  office find clear evidence of the commission of an offence, it has the exceptional power, under Article 22(b) of the Law, to order the detention of the accused person, but must produce the supporting evidence with 48 hours and follow the procedures under Article 24 of the Criminal Procedure Code (CPC). Article 24 of the CPC relates to Police investigations and arrest powers in cases of emergency. The investigatory powers of the Auditor General’s Office  are set out in Article 22.

This Law replaced the 1972 Law on Magistrates of Accounts - Law No. 34 of 13 April 1972, as well as the later laws dealing with the structure of that Office (Establishment of the Office of the Magistrates of Accounts - Decree No. 69 of 13 March 1973 and the later Establishment of the Office of the Auditor General - Decree No. 19bis of 1 June 1986)

 Other Public Finance Laws:

Other than the Financial and accouncing Law and Regulations mentioned above, this 1996  Somaliland Presidential Decree  re-adopted the following  pre 1969 public finance laws to Somaliland (249/96 of 15 May 1996) .

  1. Customs Law -  No. 91/96
  2. Stamp Duty Law  - No. 85/96 (in English) and, also, now,  in  Somali
  3. Investigation and Suppression of Violation of Financial  law -  No. 86/96 (in English) - This Law deals only with administrative violations and offences specifically mentioned in financial laws (and especially those relating to taxes) and does not supersede either the crimes specified in the Penal Code or those crimes which are set out on other special laws, such as those dealing with corruption.
  4. Stores Regulation – No. 88/96- these are essentially the 1962 Stores Regulations the continued use of use of which was confirmed by presidential decree 249/1996 (see above)
  5. The Body of Laws on Direct Taxation No. 89/96- See below for a copy of the Law in English
  6. LAW No.86/96 of 13 March 1996 (Somaliland Direct Tax Law)






    Download Pages

    Cover and Index

    1 - 3

    1 - 10  

    PART I

    Title I: General Provisions

    1 - 5

    Imposition of Tax

    4 - 5

    6 - 11

    Persons assessable

    6 - 7

    12 - 14

    Chargeable Income

    8 - 9

    15 - 17


    9 - 10

    18 - 24


    11 - 13

    11 - 19


    25 - 30


    14 - 16

    31 - 35

    Income from Employment

    16 - 17

    36 - 38

    Rates of Taxes


    39 - 51


    (Arts 48 – 49 missing from this copy)

    19 - 24

    20 - 31

    52 - 65


    25 - 29

    66 - 74


    30  - 32

    32 - 41

    75 - 99

    Compulsory execution

    32 - 42

    100 - 106

    Penalties in respect of offence committed in the ascertainment stage

    43 - 45

    42 - 50

    107 - 110

    Penalties in respect of offence committed in the collection stage

    46 - 47

    111 - 112




    113 - 120

    Tax on companies capital

    47 - 49


    121 - 125

    Final and transitional provisions



    •  Decree Law No. 23/2000 of 28 August 2000 (English  -  7 Articles) (Somali version of the Decree)
    • Decree Law No. 23/2000 as approved by the House of Representatives on 24 February 2001 (Somali – 5 Articles) and reported by Maandeq,the state owned newspaper on 27 February 2001 .  Note: The missing last 2 articles dealt with respectively with abrogation and commencement – see the English language version. 


        Summary of Main points of the Somaliland Direct Tax Law (Law no: 89/96)

    1.      Income tax is charged upon income accruing or received in the Republic of Somaliland. It is charged on income in cash or in kind deriving from capital, work  or from any other source.  For taxable income, see Arts 12 to 14.

    2.      The year of assessment is 1 January to 31 December.

    3.      The law covers all physical or juridical persons (and not just individuals). The list of Art. 15 exemptees include

    • the President of the Republic;
    • international organisations and UN employees, diplomatic agents;
    • armed forces members below non-commissioned ranks ( but under Article 3 of  Law no. 23/2000 the exemption applies temporarily to all armed forces members) ;
    • lawfully established charitable and welfare organisations, academies and cultural societies and religious institutions (all on non-commercial activities income); and
    • mining/oil concession holders who are exempt from income tax. See also Art. 16 on permanent exemptions on incomes from for example, buildings for religious worship, state owned buildings, cemeteries, rural buildings etc.

    4.      For allowable deductions, see Arts. 18 to 23. 

    5.       Obligations to furnish returns, including those from non-resident persons and associations, see Arts. 25 to 30.  The minimum income for such an obligation is set out in Art. 30.

    6.      Obligation of employers on deducting tax – Art.  31  to 35

    7.      Rates of tax, which shall of course change periodically, are set out in Arts. 36 to 38.

    8.      Assessments of payable tax by the Direct Taxation Office (DTO)  are dealt with by Arts. 39 to 49.  The powers of the DTO in respect of assessments are set out in Art. 50.

    9.      Appeals against the decisions of the Revenue offices are set out in Arts 52 to 65

    • The Regional Court has jurisdiction at first instance (Art.53) – see also 7(6)9(c) of the Organisation of the Judiciary Law (Law no. 24/03706).  Appeals go to the Court of Appeal and then, on questions of law only,  to the Supreme Court.
    •  Time limits  for appeals are set out in Articles 54, 61, 63 and 64.  The initial time limit is 30 days from the receipt of the Revenue Office Assessment and the same period for appeals against the Regional Court decision, by either side, to the Court of Appeal.
    •  The Civil Procedure Code applies to these cases. Although Art. 53 of this Law makes provision for the appointment of assessors to hear taxation cases, it is unlikely that this provision has survived the Article 7 of the Organisation Law which makes no mention of assessors.

    10.   The state’s tax claims shall be “preferentially secure(d) on all the movable and the immovable property of the person assessed” – Art. 73(3).  The attachment of the debtor’s property does not require “prior authorisation” of the court (Art. 77). Objections to such enforcement may be made by the person concerned or by other affected third parties (Article 87  - 88) and final enforcement decisions of the Revenue Office may be challenged at Supreme Court (Art. 89(3).

    11.   Offence under the law include:

    • Failure to furnish returns (Art. 100);
    • Delayed or incorrect returns (Art. 101 – 102);
    • Fraud (Art. 104);
    • Failure to comply with the orders  of or give details to the Tax Office (Arts. 105 – 106);
    • Suspension from activity (Art. 108);
    • Failure to pay tax (Art. 109).

    12.  Tax on Companies’ Capital –

    • Chargeable on companies operating in Somaliland, as well as “bodies of persons and associations”.
    • List of exemptees is set out in Art. 119.
    • Chargeable capital is set out in Art. 116.
    • Procedures for returns and appeals etc are the same as other direct taxes.

 Many of the direct tax provisions in Law No. 86/96 have not been fully implemented so far because of the difficulties of implementing a collection regime based on annual returns. However because of the relative of ease of “Pay as Earn”, the bulk of income tax collected remain to be mainly deduction from the salaries of public employees and  from some private employees.  A trawl of the Ministerial Budget submissions of the last few years indicates the following figures for Income taxes:  

      (Figures in billion SL Shillings)

  • Budget Year

    Public Employees

    Private Employees

    Commercial Income

    Rental Income

    2009 forecast










    2007 forecast















    2003 forecast











Other Revenue & Public Finance Laws:

  • Local Government Unified Tariffs Law No. 12/2000 (Somali) and including the Presidential decree bringing into force.  Also Ministerial Circular 7/2000 relating to this Law
  • Ports Tariffs Law  (It is believed that this law is based on the 1985 Regulations)
  • Circulation Tax Law No. 82/96
  • Sales Tax Law  No. 84/96
  • Registration Tax Law No. 83/96
  • Aviation & Airport Tax Law 10/1999
  • Airports Security Tariffs Law - Law No. 61/2013
  • Post & Telecommunication Taxes Law No. 11/1999
  • Public Contracts Law No. 79/1996

Central Banking and Currency (see Separate page on Banking Law - coming soon!)


Law on the Prevention of the Misappropriation of Public Assets & on Combatting Corruption - Law No.38/2007  - large pdf file - in Somali.  A  smaller pdf file of this Law is available in the Somaliland Criminal Law page.

Somaliland National Budget Laws:

The 2012 Budget Presidential Decree and the House Resolution. The Decree dated 07 April 2012 brought the much delayed budget into force.

The Somaliland National Budget Law  (Law no. 44/2010) was  passed by the House of Representatives on 10 May 2010, and the then  President Rayale returned the Bill to the House on 1 June 2010. Since the  the presidential election  on 26 June 2010, the bill has not been re-considered by the House.

Somaliland Budgets Assessments

The House of Representatives’ Economy & Finance Committee investigated and analysed the first budget   submitted to the newly elected House in 2006. A copy of their study is attached. This is the best oversight report of the budget undertaken by the Committee.  

The following assessments of the last Somaliland budgets were made by, Alla how naxiriste, the late Mr Ali Gulaid CPA (Ali Marshal):


2003 Budget Analysis




Miisaaniyada Sanadka 2005


Miisaaniyada 2006




Naqdiga Miisaaniyada 2009









  2010 Somaliland Budget: The House of Representatives’ Economy Committee has issued their analysis of the late 2010 budget submitted to the House recently and approved on 10 May 2010.

2010 Budget Commentary by Mr Abdirahman Mohamed (source: )


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