Somaliland: Reforming Public Finance Management

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Somalilandsun – This Faculty Research Working Paper Series elaborates framework for understanding public financial management reform based on the four drivers of public sector reform: COPS—context, ownership, purpose and strategy. Public financial management is a core function of the state and its sovereignty and it is not an appropriate arena for foreign aid intervention—governments must fully own it, which was a key to success.

According to its author Yusuf Mohamed Ismail AKA Yusuf Soraan Somaliland tax system was first introduced by the British Protectorate administration in the early 20th century, the people of Somaliland Protectorate considered taxation an unjust imposition by the colonizing or Protectorate power and thus it is unclean and profane. In addition to that the business and trade activities were very limited; At that time the British Protectorate administration faced a constraint in taxing, and its budget was required subsidies from the British government, because the amount of revenue collected was not applicable to cover the expenditures of the administration.

Often the 34

Often notes the study , the biggest obstacles to paying taxes for small businesses are the lack of basic accounting skills as well as the gap between the tax law and its interpretation in practice. The government can fill this gap by providing capacity-building and training for small businesses. The benefits to tax training are mutual: if well-trained entrepreneurs are able to file returns and pay taxes more efficiently, the government can improve compliance with the tax regulation.

To this effect the working paper recommends that The government of Somaliland must remain in the driver’s seat of management and operation of public financial management reform and then to put in place the infrastructure needed to support existing systems (e.g. in-service training facilities and programs) which could then be used later to support new systems that recommended strengthening revenue policy and administration. Having the infrastructure in place for supporting public financial management means that these systems can adapt to rapid changes in government policy; Given that public financial management reforms are very long-term affairs, they must be designed for the inevitable and often disruptive political and administrative changes. It is far easier to weather a violent storm from a firm plateau, than from an exposed summit.

Yuusuf SooraanThe author Yusuf Mohamed Ismail AKA Yusuf Soraan is a Graduate from the Institute of Tax and Custom Administration in Ethiopian Civil Service University and deeply committed to revenue reform issues with extensive knowledge of tax and custom administration .Currently serving as Municipal Finance advisor with Hargeisa Municipality, Somaliland. Prior He participated in the inception phase of 6879: Somaliland strengthening revenue policy and administration;

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Reforming Public Financial Management in Somaliland

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