Tax hike sparks DP World Berbera protest

Port of Berbera Port of Berbera. Credit: Lakmi00 [CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0)]
Industry Database

Operations at DP World Berbera have been hit by delays for the fifth consecutive day as local businesses protest an increase in goods and services tax.

DP World, which won its controversial 30-year operating agreement at Somaliland’s Port of Berbera in 2016, is able to increase tariffs on a biannual basis in consultation with the government - ensuring the tariff is competitive with neighbouring countries, but local importers have ceased payments and left goods stranded at the port, stated the Somaliland Press.

The Somaliland minister of commerce and investment Mahmud Hasan Sa'ad has declared support for the port operator’s tax hike and issued a warning to businesses withholding payment that they must pay their outstanding dues and pick up the goods or risk paying extra fees on account of the delays.

DP World has the power to set, amend, levy, collect and recover tariffs of the users of the port, as per its 65% stake in a joint venture agreement to manage and develop the US$442m multipurpose port project with the government of Somaliland.

However in March 2018, the deal, which comes with an automatic 10-year extension, was declared “non-existent, null and void” by the Federal Government of Somalia, which doesn’t recognise Somaliland’s 1991 declaration of autonomy.

The chairperson of Somaliland Chamber of Commerce plans to take up the matter with the president to discuss the grievances.

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