A PAINFUL PINCH

Many Kurds in Syria may dream of self-rule, but for business owners in the semi-autonomous region in the country’s north, it now comes with a painful pinch: Double taxes. For several months, traders in the selfproclaimed “federal region” in northern Syria have had to pay dues to both Kurdish authorities and the central government in Damascus. “We don’t even know who we’re paying anymore,” said Afasta, a 29-year-old pharmacist who did not give her second name. “We used to make a 50 per cent profit, but it’s changed since we started paying two sets of taxes,” she said, as she handed medicine to a client in her pharmacy in the Kurdish-majority town of Qamishli.

Syria’s conflict broke out in 2011 and, in an effort to appease the country’s Kurds, government troops withdrew from Kurdish-majority areas the following year.

Autonomous administrations were established there that steadily built up their own institutions: Schools, police forces and hospitals.

The central government maintained a limited security presence in two areas, Qamishli and the provincial capital of Hasakeh further south, but it continued to levy taxes. Business owners were paying between 17,000 and 25,000 Syrian pounds yearly to the Damascus regime, which amounts to a range of about $40 to $60.

But late last year, the autonomous Kurdish administration also piled on its own progressive tax scale for businesses in their area of control.

“This double taxation is weighing heavily on us, especially since our profits were already slim and with economic activity at a low,” said Nabil Adam, 34, who sells women’s clothes in Qamishli.

The taxes are calculated according to a gradual profit scale with 13 different categories. Businesses making under 1.2 million Syrian pounds (around $2,760) a year pay a symbolic 1,000 Syrian pounds (about $2). Those bringing in a gross profit of between five and seven million Syrian pounds, or between $11,500 and $16,100, are taxed at seven per cent.

The highest rate — 24 per cent — is for operations making a gross profit of more than 100 million Syrian pounds, or about $230,000 annually. Since it was introduced in October and until April, the tax has already brought in 349 million Syrian pounds or around $800,000, said Khaled Mahmud, who co-manages the autonomous region’s financial affairs. “The autonomous administration wants to improve its service provision, so it needs more revenues for the budget,” he said.

With more resources, local authorities would be able to develop the quality of basic services like electricity and water, create jobs, and even provide healthcare, said Mahmud.