The Somaliland manufacturing sector showed displeasure in a recent presidential decree which nullified free duty concessions formerly offered to the sector to encourage productivity and growth.
In a press conference which capped a consultative meeting which brought leaders of the nascent sector together on Sunday, the small-scale but growing manufacturers decried the introduction of reforms to the section tables of the nation. They said the incentive to firmly set a viable productive, industrial presence in Somaliland no longer exists.
”The sector drew much courage from the few tax shelters and duty-free concessions the government offered it in the past. If that is withdrawn, then the sector will certainly suffer, job opportunities will dwindle and the burden on the consumer will exponentially take an upward surge,” Mohamed Sheikh Omar, Sector Steering Committee Chairman said.
Mr. Omar said the sector was disappointed that the President did not honour promises he made to the varying productive sectors of the nation of which they took heart.
“We expected an input that, in fact, appears to be at a distant end to what the Presidential Decree is introducing,” he said, adding that current supremacy in the market of their products over imported goods was only made possible by the shelters successive Somaliland governments gave them.
”The government is ours, and we are bound by law to obey it. But, then, it is only within our civic rights to let know of our grievances and the implications reviews to the status quo entail,” was the collective note the committee wished to convey to the President and his government.
Among the many reforms, a presidential decree released on 28 August introduced were that only plants that have a certifiable working capital of no less than US$250000, and a workforce capacity of not less than 30 employees will be eligible for a waiver from customs import duty on equipment and initial materials.
The decree states that some form of raw materials tax shelter will only be provided for the first three years from the date of establishment to a new plant, but that – large or small – all manufacturing plants are duty-bound to pay sales, income and profit taxes – regardless.
On an already limping sector that has yet to grow beyond spring water bottling, beverages, dairy produce, paint and a few foam plants, the introduction of these many taxes and the withdrawal of duty-free concessions cannot be fathomed at present, even though the decree refers to some kind of a ‘continued encouragement’ to sector.
