Competition between Al-Shabab and pro-Islamic State groups in Somalia is further stifling economic activity across the area through forced taxation. “Business are paying three taxes today, Al-Shabab taxes, Daesh taxes, and the normal government taxes,” according to the former director of the National Intelligence Agency in Somalia. “If they don’t pay, they will be targeted, as well as their children and wealth. The punishment is death. They have to choose between the two.” Al-Shabab has become the “most ruthless” collector nearly everywhere, collecting taxes more effectively than the government. The group collects taxes on sales of produce, livestock, and general taxes. Their largest income stream is taxation of vehicles transiting through their controlled areas. The group collected $27 million in 2017, according to one estimate, “more than enough revenue to sustain its insurgency” through the “centralized taxation system applied consistently across southern and central Somalia. The UN estimates that the group collects around $10 million per year through their most lucrative checkpoint. IS-supporting groups are smaller and younger, dating back only to a splinter from Al-Shabab in 2015. Originally active in the semi-autonomous Puntland, the group has expanded and has targeted wealthy individuals in Mogadishu for failing to pay demanded “taxes.”
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