Analysis of 2018 Fiscal Budget of the Federal Government of Somalia
Mareeg.com-Article 99 (d) of the Provisional Constitution of the Federal Government of Somalia (FGS) tasks the Executive Branch to prepare the annual fiscal budget and final accounts. The Legislative Branch reviews and amends the proposed budget before passing the appropriation bill that authorizes collection and spending of public money during the fiscal year that starts from 1st January to 31st December. The fiscal budget is constitutional, political, economic, and financial document that highlights the government’s performance priorities in twelfth months. It is an indicator of state effectiveness.
Unfortunately, the FGS is not adequately fulfilling one important constitutional requirement which is the publication of regular, complete, reliable financial statements during and end of each fiscal year, a reporting that is critical for state accountability and legitimacy. The passive roles of the federal parliament, Central Bank, the General Accountant, and Auditor General on public financial transparency and accountability have perpetuated the persistent of highest corruption perception index in Somalia. FGS’s progress claims should backed with facts and figures. The IMF’s cheer up on budget performance should be taken with grain of salt.
Before delving into 2018 budget analysis, I briefly address the question of taxation for revenue mobilization and state building. Constitutionally, the FGS has the legitimacy to levy taxes on citizens to raise the financial resources needed to deliver essential public goods for economic and social development. However, in levying taxes, the FGS has the obligation to follow well established taxation policy principles, legislative and policy processes, and administrative practices. Few of the well-known tax principles are neutrality, equity and fairness, convenience of payment, simplicity, economic growth and efficiency.
Somali leaders and officials responsible on fiscal policy should be familiar with the fact that the operational partnership strategy in fragile states like Somalia considers taxation the foundation for “effective state, robust economy, and durable peace” on the basis of the principles of “political inclusion, accountability and transparency, political commitment to shared prosperity, effective revenue raising and legitimization of social and economic interests.”