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Syrian Kurd traders suffer from twin tax systems

By AFP - May 24,2018 - Last updated at May 24,2018

An employee of a currency exchange counter counts banknotes at a market street in the northeastern Syrian town of Qamishli, on May 2 (AFP photo)

QAMISHLI, Syria — Many Kurds in Syria may dream of self-rule, but for business owners in the semi-autonomous region in the country's north, it now comes with a painful pinch: double taxes.

For several months, traders in the self-proclaimed "federal region" in northern Syria have had to pay dues to both Kurdish authorities and the central government in Damascus.

"We don't even know who we're paying anymore," said Afasta, a 29-year-old pharmacist wearing a black face veil who did not give her second name.

"We used to make a 50 per cent profit, but it's changed since we started paying two sets of taxes," she said, as she handed medicine to a client in her pharmacy in the Kurdish-majority town of Qamishli.

Syria's conflict broke out in 2011 and, in an effort to appease the country's Kurds, government troops withdrew from Kurdish-majority areas the following year.

Autonomous administrations were established there that steadily built up their own institutions: schools, police forces and hospitals.

The central government maintained a limited security presence in two areas, Qamishli and the provincial capital of Hasakeh further south, but it continued to levy taxes.

Business owners were paying between 17,000 and 25,000 Syrian pounds yearly to the Damascus regime, which amounts to a range of about $40 to $60.

But late last year, the autonomous Kurdish administration also piled on its own progressive tax scale for businesses in their area of control.

 

Follow the money 

 

"This double taxation is weighing heavily on us, especially since our profits were already slim and with economic activity at a low," said Nabil Adam, 34, who sells women's clothes in Qamishli.

Since it was introduced in October and until April, the tax has already brought in 349 million Syrian pounds or around $800,000, said Khaled Mahmud, who co-manages the autonomous region's financial affairs.

"The autonomous administration wants to improve its service provision, so it needs more revenues for the budget," he told AFP.

With more resources, local authorities would be able to develop the quality of basic services like electricity and water, create jobs, and even provide healthcare, said Mahmud. 

But Fayyez Abbas, 35, has been unimpressed by service provision and said he found little incentive to pay more. 

"Water, electricity, healthcare, basic services like education — we don't have any of it," said Abbas, who peddles beauty products in Qamishli's covered market.

"We would be prepared to pay even more — if the services were actually provided," he added.

"We have a right to know where the money goes." 

Syria's Kurds control around a fourth of the country, but large parts of that land borders Turkey to the north, which has sealed off the border. 

There is little trade with the rival Syrian rebels who are present to the west or with regime forces to the south.

The economy in northern Syria has always been rooted in agriculture, and Kurds have recently begun extracting and refining crude oil.

Even local officials have criticised the hurried implementation of the new tax, which was originally meant to be introduced in 2019.

"The financial authority has rushed to implement the taxes to try to cover the cost of it twice increasing public salaries," said Dalbrin Mohammad, a member of the Kurdish legislative council.

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