Syrian Ministry of Finance tax collection angers taxpayers
DAMASCUS, Syria (North Press) – The relationship between the Syrian Ministry of Finance and industrialists and merchants is defined by a lack of trust, with the ministry viewing all owners of capital as tax evaders and liars.
At the end of May, Syrian Finance Minister Kinan Yaghi revealed that hundreds of billions were collected from the “corrupt,” and vowed to curb tax evasion and prosecute those accused of it.
One economic expert describes Syria as “a tax paradise for businessmen, who pay bribes by the millions, evade, and suffer when paying the tax due on them.”
A tax haven is an offshore country that allows wealthy individuals and business owners to bank with the country’s local institutions in order to avoid paying home country taxes on gains or profits.
The semi-empty financial coffers imposed a different method of work, as the resources became very limited, and the investment of all available opportunities became irreplaceable, so the ministry adopted a new mechanism to verify the profits of the owners of the industrial establishments themselves.
The new method relies on a group of income controllers raiding the economic establishment, or “breaking into it,” as the owners of capital describe it.
Some people in the group take over the work in the place of the accountant to verify the amount of profit themselves, and then the tax is set based on this.
In other situations, they need more than a day to count inventory and imports in warehouses; this is what happened to the owners of some famous stores, such as Nafisa Sweets and Daoud in Damascus.
The Ministry of Finance had decided to form a new committee to study the tax system, review the tax legislation in force, and propose the necessary legislative amendments. The committee’s meetings will be set to no less than two meetings per month.
Old story
The amounts discovered during 2019 and required to be recovered for the benefit of the state’s public treasury from public authorities in the economic and administrative sectors exceeded 13.15 billion Syrian pounds, in addition to 425,370 thousand euros, and 455,170 dollars.
At the time, it was estimated that 5.4 billion SYP of the sums discovered during 2019 were caused by corruption, as a result of deceit, subterfuge, and concealment, and required administrative and behavioral penalties against violators, according to the ministry.
Each of the two parties [industrialists/merchants and economic controllers] knows each other well.
In his talks and lectures, Ibrahim al-Adi, a professor of economics at Damascus University, describes Syria as “a tax evasion heaven,” and estimated its value at more than two trillion SYP. This figure is somewhat equivalent to the total values of social support in the current year’s budget.
He points out that war conditions have allowed for greater rates of evasion than before, and that tax evaders use illegal methods to reduce their tax.
He also describes the tax collection system as “backward, and globally extinct, as it is more than 70 years old.”
Al-Adi added, “The Syrian businessman is in a state of constant dispute with the Ministry of Finance, and it depends on submitting false data.”
Tax evasion is considered one of the biggest crimes in all countries of the world, and the problem in Syria is that the way employees work in finance as well as in customs and catering, most of them earn huge fortunes, with money that went into their pockets instead of the financial funds.
Al-Adi considered that the term tax evasion is a cosmetic term for the state of tax corruption, “because the Tax evasion, on the other hand, is all illegal methods and attempts to reduce your tax liability by deceit, subterfuge, or concealment.”
The private sector in Syria is characterized by various features imposed on it by the work environment that relies on quotas between private owners and decision-making officials in a way that made capital owners resent any demand for payment, because they pay off government officials to obtain protection and evade taxes.
Complicated issue
A Damascus businessman, who is a member of its Chamber of Commerce, stressed that the issue of taxes is very complicated, and that there is a book for taxes on profits and lump-sum income. He pointed out that all criteria used for calculating and estimating taxes are incorrect, and that the Finance Ministry has no desire to correct and reform it.
The source, who preferred not to be named, added that the assignment is according to the temperament of the taxpayer, indicating that it is subject to temperamental standards, “where the finance officer can do you justice or wrong you. Therefore, you find everyone paying under the table so that things do not become more complicated.”
He said, “The finance officer is acquainted with large numbers due to inflation; he is the one who can set the number at one million or 100 million.”
Matters escalated during the last visit of Ministry of Finance employees to Aleppo, as a team from the Ministry of Finance arrived in Aleppo without paying attention or taking the work and data of the finance employees seriously there.
The tax that was imposed on a plastics factory aroused the discontent of the owner of the facility, Hisham Dahman, who moved his battle with finance to social media after being taxed an amount exceeding five billion SYP three years ago.
Dahman decided to close the facility, and many reactions emerged from merchants and official bodies: “How can the government not appreciate the efforts of the industrialists who continued to work in the country despite all the war conditions, as they say?”