Islamic State’s new taxes, fines indicate worsening financial situation – IHS

New fines since Dec. 2015: Not trimming one’s beard, leaving house door open, repairing or installing satellite dishes

Islamic

A snap shot of some of the taxes and fines imposed by the Islamic State (Graphic: Business Wire)

LONDON- In response to their worsening financial situation, the Islamic State is continuing to increase, taxes and fines throughout its territory and in some cases introducing new ones.

New analysis released by international consultancy IHS Inc. reveals new information on the group’s centralized and pervasive taxation system.

“Taxation makes up about 50 per cent of the Islamic State’s monthly revenue sources and encompasses almost every aspect of the population’s life,” said Ludovico Carlino, senior analyst at IHS.

“Taxes are imposed by a central government body and flexibility is allowed for regional governors. But, revenue from taxation has decreased by 23 per cent due to the group’s failure to hold onto territory.”

Between Dec. and March, the Islamic State lost about 22 per cent of its territory, according to IHS.

“The population controlled by the Islamic State declined from around nine million to around six million people. There are fewer people and business activities to tax; the same applies to properties and land to confiscate,” said Columb Strack, senior analyst at IHS.

Increases in Taxation and Fines

“In the past six months, the Islamic State has introduced a range of new taxes and fines as a means of generating additional revenue from the population to compensate for the loss of oil revenue and from its shrinking territory,” Carlino said. “Since September, we have seen taxes rise across the caliphate.”

Taxes and fines can be broken down into five categories: Social Behavior, Education, Agriculture, Policing and Provision of Services. The graphic provided is a snap shot of examples of taxes and fines IHS found during its study of the group.

Trucks crossing check points must now pay between $600 and $700, last summer the fee was $300.

The Islamic State also requires non-Sunni Muslims, former members of the security forces or former civil servants working for the Iraqi or Syrian government living in its territory to buy from it a ‘repentance’ certificate.

Repentance used to be paid on an annual basis, now it is charged monthly. This is on top of the required payment of the jizyah, a tax historically levied on non-Muslims permanently residing in Muslim lands under Islamic law.

“The most heavily enforced category is Social Behavior,” Carlino said. “The Islamic State is very specific on dress codes, identification cards and neither smoking nor drinking. In February and March, we saw the Sharia police getting harsher and stricter with the population, an indicator of their financial troubles adding up.”

New fines introduced since Dec. 2015 include: fines for not trimming their beard, fines for leaving the house door open, fines for repairing or installing satellite dishes.

“We also noticed another very interesting trend. The Islamic State is accepting money in exchange for corporal punishment. “The punishment for some fines is corporal punishment, but, the Islamic State is accepting money instead. This is big indicator of the group’s financial difficulties,” said Carlino.

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