To bail out the State’s funds, the taxman extorts the companies he inspects.
by Hélène Sallon (Beirut, correspondent)
In the spring of 2022, the financial brigade presented itself in the factory of an industrialist in the Damascus region. For eight hours, state agents peeled the account books, receipts and invoices and verified the goods. The Syrian, who requested anonymity for security reasons, considered himself in good standing with the tax administration. The tax officials, however, notified him of irregularities and claimed the equivalent of 120,000 euros in arrears; A poundy sum for this entrepreneur whose activity turns slowdown with the collapse of the economy in the country at war. The industrialist nevertheless acquitted the sum to spare more trouble.
He had heard from the setbacks of a Syrian businessman who, shortly before, had been visited at his home at night from state agents, after a search carried out in his commercial company. The entrepreneur was ordered to pay the equivalent of 250,000 euros to the tax administration. For having registered in his account books a conversion to dollars of all his transactions, the man was accused of having operated illegal transactions into foreign currencies. Threatened with a ban on leaving the territory, he fulfilled the sum and then left the country, leaving his business in sleep.
Until the small shops of Damascus or Aleppo, no more trade or industry escapes the extortion campaign led by the regime of President Bashar al-Assad under the cover of tax rigor and the fight against informal economy. “Each small store sees the tax services disembark, which peel all the papers and threaten to stop those who want to close shop,” observes the Franco-Syrian economist Samir Aïta. This campaign was launched in 2020 with the aim of replaying the state funds and putting the business circles, after a spectacular collapse of the Syrian book in the wake of the application of American sanctions César and The banking crisis in Lebanon, which cut access to foreign currency in Syria. First random, it was systematized in all sectors in spring 2022.
Within the regime’s business elite, it was accompanied by purges, following the example of Rami Makhlouf, the cousin of Bashar al-Assad, dismissed from the telephone operator Syriatel, at profit of businessmen gravitating in the shadow of the president. Hundreds of wealthy industrialists and entrepreneurs have been ransomed, threatened with a freezing of their assets or imprisonment and, for some, dispossessed of their societies, noted the expert Sinan Hatahet in A study published, in November 2021, by the European University Institute . Independent business environments which dominate the traditional production sectors (manufacture, food, textiles) and bring together traders and entrepreneurs anchored in family and local networks, are less exposed to these purges. Tax measures and restrictions on foreign currency transactions they undergo, however, risk, according to Mr. Hatahet, to suffocate these vital sectors for employment and the economy.
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