Terrorist Taxes

While the Islamic State in Iraq and Syria (ISIS) has been branded by media outlets as a brutal terrorist organization, both on the battlefield and as a nascent civil authority, it is important not to let that brutality cloud understanding of the group’s advance.  “Many observers see [ISIS] at best as an organized crime syndicate, at worst a terrorist group so viciously anti-Shiite that even al-Qaeda has disowned it. . .  Both descriptions are incomplete, as they overlook [ISIS’s] ambition to be a state (and the extent to which all states resemble organized crime rackets).” 

For ISIS, the process of state building has included tax-building.  Although the group initially depended on outright violence to raise cash, ISIS transitioned to IS, and its revenue extraction became more sophisticated.  According to reports, ISIS “enforced taxes on a variety of commercial activities, including telecommunications companies that had relay towers in ISIL-controlled zones.  Those who refused to pay risked abduction or murder.  In Syria’s Raqqa province ISIL imposed the jizya (poll tax), the same tax the prophet Muhammad placed on non-Muslim communities in return for protection.” 

To some extent, ISIS is normalizing civil control with taxes.  Raqqa’s Credit Bank is now functioning as the city’s tax authority, with employees collecting $20 every two months from business owners in exchange for electricity, water, and security.  “These forms of taxation lie near the banditry end of the spectrum, barely rising above the level of extortion. But they increasingly carry the trappings of regularized tax collection.”

Only time will tell ISIS’s legitimacy, but not every state is well established.  If we want to understand state building and recognize its manifestation, we cannot lose sight of what state-building and tax-building look like in real time. 

See Joseph Thorndike, How ISIS is Using Taxes to Build a Terrorist State, Forbes, Aug. 18, 2014.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.