Two Parliamentary Committees on Wednesday declared the introduction of Value Added Tax (VAT) which has led to a two-day strike by traders is illegal.
A statement issued by the Finance and Budget and Trade Committees say the move by Ministry of Finance to introduce the 5% VAT goes against article 125 of the Provisional Constitution.
“The VAT cannot be collected before the sale but on the consumers of goods not the sellers of the goods,†the statement said.
Finance Minister Abdirahman Beileh has defended the introduction the new sales tax.
The two committees now say the government has to go through Parliament before April 30 if it is to introduce the new sales tax.
Traders in Bakaara one of the largest markets in East Africa boycotted on Monday and Tuesday.
