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DEATH & TAXES

ISIS made more money taxing farms than stealing oil or kidnapping people

A member loyal to the Islamic State in Iraq and the Levant (ISIL) waves an ISIL flag in Raqqa June 29, 2014. The offshoot of al Qaeda which has captured swathes of territory in Iraq and Syria has declared itself an Islamic "Caliphate" and called on factions worldwide to pledge their allegiance, a statement posted on jihadist websites said on Sunday. The group, previously known as the Islamic State in Iraq and the Levant (ISIL), also known as ISIS, has renamed itself "Islamic State" and proclaimed its leader Abu Bakr al-Baghadi as "Caliph" - the head of the state, the statement said.
Reuters
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  • Tim Fernholz
By Tim Fernholz

Senior reporter

Published Last updated This article is more than 2 years old.

In 2016, the US military bragged about a massive air strike that destroyed 168 oil trucks used by the Islamic State of the Iraq and Levant, the militant Islamist group best known as ISIS, to export oil and finance its operations.

“The Coalition continues to forcefully prosecute the air war on ISIL revenue capability,” a US military spokesperson said.

But numerous documents unearthed by the New York Times show that the focus on oil—amplified by the election of president Donald Trump, whose first campaign ad promised to take ISIS’s oil—missed the real source of ISIS’s financial power: Its ability to tax everyday citizens under its rule, and particularly farmers, was the key source of funding for the group.

Analysts suggest that the annual income from these taxes amounted to $800 million annually, or around six times the estimated returns from selling oil. That’s also likely to far outstrip the money brought in by the terror group’s kidnappings for ransom.

ISIS was able to harness the power of bureaucracy as effectively as terror in its campaign to seize control of the Middle East. ISIS fighters forced Iraqi bureaucrats to return to their jobs of registering land and collecting taxes, even operating a macabre system to seize land from religious minorities for redistribution.

Times reporter Rukmini Callimachi worked to gather reams of files left behind by ISIS bureaucrats after combined US and Iraqi forces re-took territory it occupied in Iraq, handing them over to experts to help understand the economic workings of the short-lived theocracy. Now, the caliphate is no more, but ISIS itself has likely only been driven underground in the territory it once ruled.

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