Daily Management Review

After Loss of Territory Shrinks Tax Base, Isis Revenue Drops by Nearly a Third


After Loss of Territory Shrinks Tax Base, Isis Revenue Drops by Nearly a Third
A research group has said the Islamic State has been forced to introduce a range of new taxes as the group’s revenues have dropped about 30% since mid-2015, reported The Guardian.
“In mid-2015, the Islamic State’s overall monthly revenue was around $80m. As of March 2016, the Islamic State’s monthly revenue dropped to $56m,” said Ludovico Carlino, senior analyst at IHS, which issues regular reports on Isis-controlled territory.
Isis ranks have been pared back to lowest level since 2014 in the last one year following reduction in revenues of the group.
The production of oil from the Islamic State controlled areas, one of the major sources of revenues for the terrorist group, have gone down from 33,000 barrels a day to reach a total output of 21,000 barrels a day.
Although IHS warned the decline was only an “interruption of production” because jihadists were able to repair infrastructure quickly, this reduction in production was accorded largely to airstrikes by the US-led coalition and Russia.
Taxation and confiscation of businesses and property accounted for about 50% of Isis revenues for the Islamic State, the report said, while 43% coming of the revenues are generated from oil.
Drug smuggling, the sale of electricity and donations have made up the remainder of the sources of revenues, the report said.

“The Islamic State is still a force in the region but this drop in revenue is a significant figure and will increase the challenge for the group to run its territory in the long term,” Carlino said.
While Isis now ruled over six million people instead of nine million as the jihadist group has lost about 22 percent of its territory to anti Isis forces, the   IHS report said, which is the primary reasons for the reduction in the revenues as the tax base had become smaller.
“Our research has found that the Islamic State is increasing taxes on basic services and coming up with new ways to get money from the population. These taxes include tolls for truck drivers, fees for anyone installing new or repairing broken satellite dishes, and ‘exit fees’ for anyone trying to leave a city,” Carlino said.
IHS said that among the new taxes that have been imposed by Isis include  fines for not being able to answer questions correctly on the Koran while the jihadist group have also started accepting cash as an alternative to corporal punishment penalties.
Half of Syria’s population has been displaced – including five million who have fled to neighboring states since the Syrian conflict erupted in 2011. More than 270,000 people have been killed.
A truce brokered by Russia and the US in February excludes the fight against the Isis or al-Qaida’s affiliate in Syria.