Nationalising mobile money apps as state corporations for security and tax purposes

[World]

At the moment the total amount of domestic tax revenue is $230 million, vast majority raised in Xamar. This is nothing. However $2.7 billion in spent every month in Somalia on mobile money transactions. If the government can tap into 5 % of that, that will give them a whooping $1.62 billion every year in tax revenue. $1.62 billion which can be spent on infrastructure, hospitals, education. Instead, some random rich Somali gets to make that money for himself to buy himself a new mansion in Dubai or jet.

Thoughts? @bidenkulaha @TekNiKo @Dalalos_ibn_Adali @codewebsduh @Periplus @InaShaqalle

 

[World]

Another thing, Al Shabab makes tens of millions every month. Where do they receive this from?The money is sent to them on these mobile money transactions apps. This is a huge security problem. As Somalia is mainly a cashless society, if we had control of these money transfer apps, their main way of receiving money would be taken out. If they have no money, they won’t be able to pay soldiers, buy weapons. They will disintegrate without finances.

The ledgers display a sophisticated accounting system whereby Al-Shabaab collects revenues and conducts internal transfers using cash (both United States dollars and Somali shillings), mobile money, hawala money transfer and possibly bank accounts. The EVC Plus mobile money service of Hormuud Telecom Somalia Inc. supports the efficient functioning of Al-Shabaab’s financial system, allowing the group to transfer a significant percentage of its funds to its financial hub in Middle Juba region without the need to physically transport the entire amount in cash across hostile territory.

Case studies into Al-Shabaab’s domestic financing revealed that the militant group generates more than enough revenue to sustain its insurgency. Al-Shabaab continues to function as a shadow government in areas it no longer directly controls, employing a centralized taxation system applied consistently across southern and central Somalia. At one checkpoint in Bay region alone, the Monitoring Group estimates that Al-Shabaab generates approximately $10 million per year by taxing transiting vehicles and goods. Al-Shabaab’s financial operations, including the collecting of revenue and payment of its members, are facilitated by the services provided by poorly regulated domestic telecommunications and financial entities

 

[anon2]

Another thing, Al Shabab makes tens of millions every month. Where do they receive this from?The money is sent to them on these mobile money transactions apps. This is a huge security problem. As Somalia is mainly a cashless society, if we had control of these money transfer apps, their main way of receiving money would be taken out. If they have no money, they won’t be able to pay soldiers, buy weapons. They will disintegrate without finances.

If Al Shabab is using these mobile transaction apps, why doesn't the FGS work with these companies to locate Al Shabab? Not only would we able to follow their money trails and funding but we would identify these members and locate their exact areas of operations/hideout(s). A simple update to these apps that allows for geolocation monitoring would help us destroy a lot of these guy.

I have a feeling a lot of these remittance/mobile money transfer app CEO's do not want to be nationalized and I believe some of these guys who have made a fortune of not only remittance/money transfer but Internet and Mobile service providers would like Somalia to stay the way it is because it's profitable for them. They are probably in cahoots with Al Shabab

 

[bidenkulaha]

I am against nationalising in Somalia. We already see how innefficient government budget is spent. Hard to imagine they would run any business well.

Government should however work closely with these companies however and put a levy on transactions.

If we could digitalise every transaction in the country it would be a lot easier to find out who pays Shabaab and also who isn’t paying tax.

 

[World]

I am against nationalising in Somalia. We already see how innefficient government budget is spent. Hard to imagine they would run any business well.

Government should however work closely with these companies however and put a levy on transactions.

If we could digitalise every transaction in the country it would be a lot easier to find out who pays Shabaab and also who isn’t paying tax.

Some nationalising is good. In Somalia’s case, we are a cashless society. All money is going through online. If our intelligence had full control of all transactions, then Al Shabab would have problems collecting revenue, taxes, payment. We could shut them down financially. Especially if we stop the import of the dollar.

According to the U.N:
“Al-Shabaab’s financial operations, including the collecting of revenue and payment of its members, are facilitated by the services provided by poorly regulated domestic telecommunications and financial entities”

This is a huge security problem. They may even be looking the other way. If the government should not have full control and oversight of money, then what is the point of government?

 

[warside]

African countries started taxing mobile money, from Kenya and Uganda to Cameroon and Ghana, and I support this tax if most of it diverted to education, health and infrastructure. for example if this tax is 2% like in Zimbabwe, a family who spends 300$ monthly gives $6, but that same family spends around $60 or more on education, so if the schools become free thanks to this tax then I'm all for it.

 

[Removed]

This is the single most important thing a president could implement in the war against AS. A government having such little control over digital money is unheard of.

I dont buy any of the shadow government conspiracies either this country is ruled by the IC. The government is just incompetent and unmotivated against AS.

 

[warside]

You don't even need to nationalize anything, just regulate it and tax it.
Just look at the federal government finances and they can't even cover salaries without help from international donors, for example in April 2022 the revenue was $ 56M, but most of it ($ 39M) was grants from international donors, so 67% of government revenue comes from those donors.

 

[Dalalos_ibn_Adali]

businesses do pay tax to local government but the FGS refuses to account for it because it doesn't go through them, there was a FGS vs PL tax battle which PL won when they said we will pay tax if you cover all our expenses, 90% of tax collected from Xamar goes back into Xamar, infact alot of the national aid meant for the country goes into Xamar.

So the FGS cannot regulate business operating outside its tax sphere.

 

[World]

You don't even need to nationalize anything, just regulate it and tax it.
Just look at the federal government finances and they can't even cover salaries without help from international donors, for example in April 2022 the revenue was $ 56M, but most of it ($ 39M) was grants from international donors, so 67% of government revenue comes from those donors.

For national security purposes alone it should be nationalised.

Also, these companies already have their fees that consumers pay, adding an additional tax of just 1 % will impact the consumers as they will burden the cost. There have been studies on this.

As you said, Somalia’s government will collapse if it weren’t for aid but just by nationalising all money transfer companies we will no longer be dependent on aid and our budget will double. Why should these benefits be ignored so that random billionaires can be made?

In the long term, if Somalia nationalises all money transfer in our country, we can use it to create a digital ID for all of our citizens.

 

[warside]

For national security purposes alone it should be nationalised.

Also, these companies already have their fees that consumers pay, adding an additional tax of just 1 % will impact the consumers as they will burden the cost. There have been studies on this.

As you said, Somalia’s government will collapse if it weren’t for aid but just by nationalising all money transfer companies we will no longer be dependent on aid and our budget will double. Why should these benefits be ignored so that random billionaires can be made?

In the long term, if Somalia nationalises all money transfer in our country, we can use it to create a digital ID for all of our citizens.

I think the telecom companies in Somalia don't take any cut when you send mobile money, so there's no fees attached to it.
Security wise you don't need to nationalize it either, you can do the China model where you regulate it and force the companies to take the identities of the account users with biometrics.

 

[Rationale]

At the moment the total amount of domestic tax revenue is $230 million, vast majority raised in Xamar. This is nothing. However $2.7 billion in spent every month in Somalia on mobile money transactions. If the government can tap into 5 % of that, that will give them a whooping $1.62 billion every year in tax revenue. $1.62 billion which can be spent on infrastructure, hospitals, education. Instead, some random rich Somali gets to make that money for himself to buy himself a new mansion in Dubai or jet.

Thoughts? @bidenkulaha @TekNiKo @Dalalos_ibn_Adali @codewebsduh @Periplus @InaShaqalle

Major hurdle would be agreeing on how these taxes would be distributed, I cant see FMS, FGS and SL admin getting to an agreement anytime soon on this issue. Ppl expect miracles from tge FGS while supporting their uncooperative FMS or vice versa.

Anyways taxing and nationalisation are two different things. Monitoring and taxing these companies the way most Western countries regulate and taxes private banks is more than enough. When nationalisation takes place in 3rd world countrie it will always lead to a corrupt and uneffective companies. Its the same as killing the Xawaalad industry.

It surely is an absurdity, that the flow of capital is completely unmonitored in Somalia. FGS cant prevent the funding of non state actors. When every enemy of FGS can wire money to Alshabaab its no wonder Somalia is so unstable.

One easy solution in monitoring the flow of capital is enacting a new law that sets a social security number as prerequisite for opening an account.

 

[warside]

Major hurdle would be agreeing on how these taxes would be distributed, I cant see FMS, FGS and SL admin getting to an agreement anytime soon on this issue. Ppl expect miracles from tge FGS while supporting their uncooperative FMS or vice versa.

Anyways taxing and nationalisation are two different things. Monitoring and taxing these companies the way most Western countries regulate and taxes private banks is more than enough. When nationalisation takes place in 3rd world countrie it will always lead to a corrupt and uneffective companies. Its the same as killing the Xawaalad industry.

It surely is an absurdity, that the flow of capital is completely unmonitored in Somalia. FGS cant prevent the funding of non state actors. When every enemy of FGS can wire money to Alshabaab its no wonder Somalia is so unstable.

One easy solution in monitoring the flow of capital is enacting a new law that sets a social security number as prerequisite for opening an account.

South Somalia, Puntland and Somaliland all have different telecommunication companies and mobile money services, in the south is Hormuud and EVC plus, in Puntland it's Golis and sahal mobile money and in Somaliland it's Telesom and Zaad. so the federal government can focus on the south where one company dominates the mobile money market, then they can distribute that money in the south where it originated, for example they can earmark 40% of this tax to fund schools in the south, and some of it on security since SNA operates in all south Somalia FMS and Banaadir, then I'm pretty sure Puntland and Somaliland will follow suit and tax telecom companies in their respective regions.

 

[Periplus]

Another thing, Al Shabab makes tens of millions every month. Where do they receive this from?The money is sent to them on these mobile money transactions apps. This is a huge security problem. As Somalia is mainly a cashless society, if we had control of these money transfer apps, their main way of receiving money would be taken out. If they have no money, they won’t be able to pay soldiers, buy weapons. They will disintegrate without finances.

Somalia should ban phones that aren’t smartphones.

Al-Shabaab primarily use outdated Nokia’s that are hard to track.

As a result, the government should ban and stop any shipments of phones that aren’t iPhones or Androids.

Then you’ll force AS to have updated tech that is easy to track down.

 

[warside]

Somalia should ban phones that aren’t smartphones.

Al-Shabaab primarily use outdated Nokia’s that are hard to track.

As a result, the government should ban and stop any shipments of phones that aren’t iPhones or Androids.

Then you’ll force AS to have updated tech that is easy to track down.

some families can't afford the smartphone and its a necessity to have a mobile phone since you need one to buy anything with mobile money, but you can trace phone calls and mobile payments anyway and they lacking in this department probably because the government can't even fund its other obligations, so this mobile money tax is a good way to raise funds.

 

[Periplus]

some families can't afford the smartphone and its a necessity to have a mobile phone since you need one to buy anything with mobile money, but you can trace phone calls and mobile payments anyway and they lacking in this department probably because the government can't even fund its other obligations, so this mobile money tax is a good way to raise funds.

It’s extremely cheap to buy a basic smartphone like $50 or less for an android capable phone.

In fact, most people back home use smartphones now unless they’re in the countryside imo.

 

[warside]

It’s extremely cheap to buy a basic smartphone like $50 or less for an android capable phone.

In fact, most people back home use smartphones now unless they’re in the countryside imo.

That's true but you can't ignore that small percentage who can't afford it, so a solution could be to tell telecom companies to give smartphones to customers for monthly payments.