MOSUL, Iraq – Islamic State is putting the squeeze on gold merchants in Iraq’s second city, demanding extortionate “taxes” to help fund its four-month-old occupation.
ISIS has already opened two centres for tax collection on the eastern and western sides of the city. Abu Bakr al-Baghdadi, self-styled caliph of the Islamic State now appears to be eyeing the wealth of the souq.
“We have to pay one third of what we have in money and gold in our shops,” said Haitham [not his real name], a goldsmith in Mosul, barely hiding his anger. “ISIS informed us to visit the tax center, which is based in the building that used to be the Iraq Museum, to declare the value and pay one third as alms.”
His son calmed him as his voice rose; ISIS militants might be within earshot.
“The religion of Islam says that the tax on gold is 2.5 percent, so where did they get this ruling from?” asked the goldsmith. “But I will give them one third of my gold and money to avoid their Sharia Courts, which usually ends in either a whipping or death. I will sell my shop after this, before I lose everything I have,” he lamented.
ISIS does not only target gold shops. Simple street vendors and gas stations have also been ordered to pay “alms”.
Yousef, a street vendor in his twenties, was arranging his goods and getting back to work after he paid what he was told he owed to ISIS. “The street vendors have to pay no less than $2,000 in rent, which all goes to the finance ministry of the Islamic Caliphate,” he said.
“I paid $2100 and got a receipt that just has the stamp of ISIS on it. The receipt does not mention the amount I paid or even carry a signature,” he says “I had to pay it, otherwise I would become unemployed like so many others who are left in Mosul without a job.”
ISIS recently announced gas stations in Mosul must renew their contracts according to new rules, which are aimed at increasing the income into the militants’ coffers.
The new rules tap private money as well as that held in government banks. Saba, a resident of Mosul, said that she had to wait for three months for the banks to reopen. “It was not easy to withdraw all my money from the bank as there are certain rules that ISIS has imposed. A person cannot withdraw an amount exceeding 20 million Iraqi Dinars [$17,200],” said Saba.
Saba showed a paper with the ISIS seal on it, “Before going to the bank, you have to first go to the ISIS court and request to withdraw money from the bank and state the reason why,” she said. “Those who have put their money in the bank to earn interest via saving accounts will lose all their right to claim their money back, because they consider savings accounts as usury,” said Saba.
“The whole process of money withdrawal will take more than one week, and after standing in lines at ISIS courts and banks for days, they will deduct 10 percent from the amount you withdrew as a tax for ISIS,” she said.
To avoid becoming a victim of ISIS by losing your capital in order to finance wars in Iraq and Syria, the merchants are now avoiding banks.
Finances from Mosul have been flowing to ISIS for several years. According to a senior officer in the Iraqi Ministry of Defense, ISIS records show it raised $5 million a month in recent years.
“ISIS collected money from street vendors, merchants, pharmacies, clinics, and employees in recent years. The Iraqi state could not prevent ISIS extortion from the people of Mosul because they were not cooperating with us due to the threats and terror they were exposed to,” said the senior officer.
“Without that large amount of finances, ISIS could not have occupied Mosul, Salahaddin, Anbar or opened another big front in Syria.”