Islamic State’s New Taxes and Fines Indicate Worsening Financial Situation, IHS Says

Revenue from taxation has decreased by 23 percent; $18 a month per household charge for electricity and water, but $100 fine and lashings for possessing alcohol

LONDON--(BUSINESS WIRE)-- 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 today by IHS Inc. (NYSE: IHS), the leading global source of critical information and insight, reveals new information on the group’s centralized and pervasive taxation system.

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“Taxation makes up about 50 percent 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 percent due to the group’s failure to hold onto territory.”

Between December 2015 and March 2016, the Islamic State lost about 22 percent of its territory, according to IHS. “The population controlled by the Islamic State declined from around nine million to around six million people,” said Columb Strack, senior analyst at IHS. There are fewer people and business activities to tax; the same applies to properties and land to confiscate.”

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.

Download a larger list of taxes and fines imposed by the Islamic State

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.

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

“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.”

“We also noticed another very interesting trend,” Carlino said. 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.”

About the IHS Conflict Monitor

The IHS Conflict Monitor records about 1,000 manually geocoded indicator events for Iraq and Syria every week from social media and other open sources, systematically rated for reliability. It is a monthly deliverable, which includes analysis, data and maps. The team provides regular updates on Islamic State revenue.

The IHS Conflict Monitor includes regular analysis of the data providing unparalleled insight into the structure, operations, strengths and vulnerabilities of the Islamic State. The dataset reaches back to January 2014, delivering unique data insights into the tactics, activity and capabilities of armed actors, as well as mapping the progression of the conflict in unprecedented detail.

About IHS Jane’s (www.janes.com)

IHS Jane’s, part of IHS Inc. (NYSE: IHS), is the leading open source information provider and conference organiser on defence, international risk and national security to governments, militaries, industries and academia around the globe. IHS is the leading source of insight, analytics and expertise in critical areas that shape today’s business landscape. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS is committed to sustainable, profitable growth and employs nearly 9,000 people in 33 countries around the world.

IHS is a registered trademark of IHS Inc. All other company and product names may be trademarks of their respective owners. © 2016 IHS Inc. All rights reserved.

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IHS Inc.
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Source: IHS Inc.

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