What happens when a terrorist group collects almost as much in taxes from citizens than the government? A new report by the Hiraal Institute alleges that in Somalia this has been the case. The insurgent group al-Shabab is estimated to be collecting an approximate $15 million USD a month from Somali citizens. That’s $180 million USD a year. Anadolu Agency reported that in 2017 the Somali government’s overall tax revenue for the year was $141 million USD.
Al-Shabab has been conducting a brutal insurgency in Somalia since 2004 and effectively controls the southern half of the country. Even in the northern half, al-Shabab holds a large degree of influence as is evidenced throughout the findings of the Hiraal Institute report.
The report is the second in two years on the capabilities of al-Shabab’s domestic financing and tax collection. This report indicates a large jump in the capabilities of the group compared to just two years prior. The report is based off interviews with 70 bussinessmen, government officials, al-Shabab defectors and even current members of the group’s tax collection wing. The interviews took place in person and via the phone.
Hiraal’s findings show a well designed network of tax collection that is evolving over time. Current revenue streams for the group include placing a tax on the import and export of shipping containers at ports, an annual individual religious tax, a tax on irrigation in rural areas and the collection of tolls from checkpoints. Reuters reports that Hiraal’s findings come before a long anticipated “United Nations report expected to say al Shabaab is generating a significant cash surplus and moving millions of dollars through the formal banking system.”
The level of taxation that al-Shabab is achieving is an impressive feat, but it is driven by intimidation and fear. The report highlights multiple examples of intimidation and coercion. One of the most notable of these is about a Somali military officer who refused to pay taxes to al-Shabab.
The commander was attempting to construct his house when his contractors quit after being threatened by al-Shabab. The same thing happened to the second group of contractors and eventually even the materials for the house stopped arriving after the trucks were held up by the militants. In the end the commander had no choice but to pay almost $3,600 in tax to the group in order to finish construction.
Al-Shabab has recently had a major resurgence in Somalia during the end of 2019 and start of 2020. With increased access to finances and an unchecked sense of confidence, al-Shabab may further dominate Somalia in years to come.