Kickback fallout leads to tax collection contract termination in Somalia

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Kickback fallout leads to tax collection contract termination in Somalia

MOGADISHU (HORN OBSERVER) - Somalia's Auditor General, Ahmed Isse Gutale, has terminated a tax collection contract awarded to the private firm MGS Soft INC in the capital city, Mogadishu.

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Auditor General, Ahmed Isse Gutale.

MOGADISHU (HORN OBSERVER) - Somalia's Auditor General, Ahmed Isse Gutale, has terminated a tax collection contract awarded to the private firm MGS Soft INC in the capital city, Mogadishu.

The move comes amid allegations of a kickback deal gone awry, exposing a web of corruption within the country.

The termination, outlined in a memo dated January 29, was based on Auditor General Gutale's assertion that the contract between the Ministry of Finance of the Federal Government of Somalia and MGS Soft INC, a private firm tasked to collect revenue, was a clear violation of financial laws.

"The agreement is against the financial procedures law," Gutale emphasized, calling for an immediate end to the controversial deal.

However, the fallout from the termination revealed a deeper issue. Revenues collected through EVC (mobile money) transactions were swiftly withdrawn by unidentified officials, raising concerns about the destination of the funds.

Despite the termination, no explanation has been provided regarding the mysterious disappearance of the collected money.

Allegations have surfaced suggesting that both Auditor General Gutale and the director of the national intelligence (NISA) Mahad Salad had anticipated kickbacks from the contracted company. When the payments fell short of expectations, the contract was promptly canceled, at least two senior officials at the ministry of finance who were not happy with the cancelation said.

Despite repeated inquiries, Gutale and Salad have remained silent on the matter.

Director of Inland Revenue Abdullahi Nur Mohamed shed light on the situation, stating that the company was hired by certain government officials without divulging specific details.

Mohamed defied opposition from top Ministry of Finance officials and ordered his staff to return to their offices, resuming tax collection by January 15.

A perplexing standoff continues, with the Ministry of Finance advocating for the continuation of the contract, while Auditor General Gutale insists on its immediate cancellation.

Another rift surfaces between the Ministry of Finance officials and Auditor General Gutale, adding to a series of disputes.

In November 2023, a disagreement arose between Gutale and Finance Minister Bihi Iman Ige over the utilization of the payment request form, commonly known as F16. The minister suggested replacing the form, excluding the auditor's signature, a move perceived as an attempt to thwart Gutale's alleged demand for a 5% kickback from each approved transaction.

Despite Gutale's opposition, the minister proceeded with the proposal. In response, the government accountant took the matter to the solicitor general, seeking legal clarification.

The issue remains unresolved, indicating a persistent conflict over financial matters within the government.

This latest revelation adds to the existing tensions and raises questions about the transparency and collaboration between key figures in Somalia's financial administration.

Somalia's tarnished reputation in recent weeks reached a new low when Transparency International, a non-profit group monitoring global corruption, labeled it as the worst corrupt country on earth with a score of 11, the lowest ever recorded.