Somalia’s healthcare tax waiver: A strategic advancement toward strengthening a fragile health system

The recent decision by the Federal Government of Somalia to exempt
healthcare services from the previously implemented 5% Value-Added
Tax (VAT) marks a significant and commendable policy advancement
towards improving healthcare accessibility and affordability within the
nation [1]. Initially introduced in August 2024, this sales tax raised
substantial concerns due to its potential to exacerbate existing challenges within Somalia’s already fragile healthcare system [2]. Its recent
waiver, as reported by FTL Somalia, is thus a positive and responsive
move that reflects governmental responsiveness to evidence-based
advocacy and public health considerations [1]. To fully appreciate the
importance of this policy reversal, it is essential to contextualize the
historical and current states of Somalia’s healthcare system. Historically, Somalia’s healthcare infrastructure has faced persistent challenges
stemming from decades of political instability, armed conflict, and
economic hardship [3]. Prior to the collapse of the central government
in 1991, healthcare services were predominantly publicly funded,
although they were inadequately resourced due to disproportionate
military expenditures and inefficient governance structures. The civil
war led to widespread destruction of healthcare infrastructure,
displacement of medical personnel, and disruption of essential health
services across the country [3].
In the decades following the state collapse, Somalia’s healthcare
sector became predominantly privatized and fragmented, characterized
by minimal regulatory oversight and uneven service distribution [2].
Today, healthcare delivery in Somalia is largely dominated by private
sector providers, whose services are paid for out-of-pocket by patients
[2]. This has created significant financial barriers for ordinary citizens,
particularly those residing in rural areas or below the poverty line [4].
With over half of Somalia’s population facing severe economic constraints, affordability is a major determinant of healthcare access. The
current healthcare landscape in Somalia reflects these historical challenges. Only approximately 35% of Somalis have access to basic health
services, leaving the majority without adequate care coverage [5]. This
limited access is compounded by significant geographic disparities;
urban regions, such as Mogadishu, possess relatively better-equipped
facilities than rural areas, which remain underserved due to inadequate infrastructure and severe shortages of qualified health professionals. Nationally, Somalia faces alarmingly high maternal mortality
rates, estimated at around 692 per 100,000 live births, and child mortality rates reaching approximately 106 deaths per 1000 children under
five years old [6]. These indicators highlight the urgent need to improve
maternal and child health services.
Moreover, there is an acute shortage of skilled healthcare workers.
With only 2.5 physicians and 4.5 nurses and midwives per 10,000
population, far below the WHO’s recommended threshold, Somalia
struggles significantly to deliver essential health services effectively [5].
Additionally, the uneven distribution of medical professionals exacerbates disparities; urban centers such as Mogadishu have relatively better
access to medical professionals compared to rural regions where shortages are severe [5]. Against this backdrop of systemic fragility and socioeconomic vulnerability, imposing VAT on healthcare services risks
further limiting access for vulnerable populations already burdened by
high out-of-pocket expenditures. Recognizing these concerns articulated
through advocacy efforts, including our previous correspondence recommending either exemption from VAT or establishment of pooled
community insurance [2], the government’s decision to waive this tax
demonstrates responsiveness towards evidence-based policymaking
aimed at protecting public health outcomes. This recent policy shift
aligns closely with global efforts to achieve Universal Health Coverage
(UHC), an essential component of Sustainable Development Goal 3 (SDG
3) [7]. Removing financial barriers from critical medical services not
only facilitates improved utilization but also contributes positively to
reducing inequities inherent within Somalia’s fragmented health system. Nevertheless, while this tax waiver represents an essential step
forward, it should not be viewed as a standalone solution but as part of
the broader strategic reforms required within Somalia’s health sector.
To sustain momentum towards UHC, policymakers must explore additional sustainable financing mechanisms, such as pooled
community-based health insurance schemes [8]. Such schemes have
demonstrated effectiveness in other low-income settings by distributing
financial risks across communities and ensuring equitable access, irrespective of individual economic status [9]. Furthermore, continued