The Triangle of Taxes: Southern Transitional Council's Illicit Earnings Exceed $200 Million Annually

Aden, Lahj, and Abyan, located in the southern region of Yemen, have become the stronghold of the Southern Transitional Council (STC). However, within this geographic triangle, residents are increasingly concerned about the council's imposition of unlawful royalties and taxes on companies, merchants, and citizens, consolidating its authority through illicit means.

A recent report published by the Gulf of Aden Media Foundation reveals that the Transitional Council collects a staggering 21,376,254,867 Yemeni riyals monthly (equivalent to $17,046,455) through illegal channels. Annually, this figure reaches a staggering 256,515,058,404 riyals (equivalent to $204,557,460). The report, compiled based on official documents, victim testimonies, field visits, investigations, and monitoring, accuses the STC of exploiting billions of riyals in tax funds daily. These funds are primarily directed towards military and security networks within the council, serving the purpose of strengthening its authority.

The Economic Committee, an entity affiliated with the Transitional Council, takes responsibility for imposing illegal taxes on fuel and goods at land and sea ports, private companies, banks, state institutions, money exchange shops, commercial stores, and even street vendors.

The report further highlights that these funds are collected openly and brazenly, with official receipts serving as proof of the daily plundering by the council.

The levies imposed on oil derivatives alone contribute a monthly revenue of 7,223,636,000 riyals, reaching an annual total of 86,683,632,000 riyals. Additionally, the Container Port and Al-Mualla Port generate monthly revenues of 1,650,000,000 rimming up to 19,800,000,000 riyals annually.

Cement factories, another target of the Transitional Council's taxation, are burdened with a monthly levy of 240,118,867 riyals, resulting in an annual collection of 2,881,426,404 riyals. The levies spread across Aden, Lahj, and Abyan governorates contribute a significant monthly sum of 7,762,500,000 riyals, reaching an annual total of 93,150,000,000 riyals.

Furthermore, the notorious "qat tax" alone generates a monthly revenue of 4,500,000,000 riyals, accumulating to 54,000,000,000 riyals annually.

The Southern Transitional Council's continuous exploitation and illegal collection of vast sums of money have raised serious concerns among residents and observers alike. The council's actions undermine the economy and perpetuate a culture of corruption and abuse of power. The repercussions of these illicit practices are felt by ordinary citizens, who are burdened with the weight of excessive taxes and the stifling effects on businesses and trade within the region.

Levies Imposed on Companies

Private entities, namely the "Al-Wahda," "Al-Wataniya," and "Astar" cement companies located in the governorates of Aden, Lahj, and Abyan, have been accused of being subject to a payment of 100 riyals for each 50 kg package of cement. These charges, labeled as "security and military support," are purportedly funneled into bank account No. 122602147 at the "Al-Qutaybi Exchange" Company. The report claims that this practice is based on a circular issued by the "Transitional Council" on September 4, 2021 AD.

According to the disclosed information, the "Transitional Council" managed to collect a staggering sum of 619,416,400 riyals from the levies imposed on the "Al-Wahda" Cement Company in Abyan and the "Al-Wataniya" Factory in Lahj during the third quarter of 2021. Additionally, the "Cisco-Aden" and "Mukalla-Raysut-Aden" factories were subjected to levies amounting to 252 million riyals, with 60 million riyals imposed on the former and 24 million riyals on the latter. The "Al-Wahda" factory, previously threatened with closure and significant job losses, claimed that its operations were hindered due to relentless "harassment against its trucks at the Transitionalsecurity points," as stated in the report.

Levies on Ports

The report also exposed alleged levies imposed on traders at the main ports of Aden, namely the Caltex Container Port and Mukalla Port. Traders were allegedly compelled to pay 50,000 riyals for every container or locomotive departing from these ports. Based on the report's findings, the average daily number of containers leaving the Caltex Port ranges between 600 and 700, while the number of tugs leaving the Moalla Port amounts to 400 to 500 per day. Shockingly, the "Transitional Council" reportedly amassed approximately 500 billion riyals from these two ports alone during the third quarter of 2021. Notably, the report details that the average monthly fee collected from the Caltex Port stands at 975 million riyals, while the Al-Mualla Port contributes 675 million riyals, resulting in a total of 1.650 billion riyals.

In yet another revelation, the "Transitional Council" is said to have directed an increase in taxes on raw materials, amounting to 102,000 riyals per truck. This directive was reportedly based on a document issued by the "Economic Committee" affiliated with the Transitional Council on January 30, 2022. Furthermore, the report highlights the imposition of a 14 riyal charge on every liter of fuel arriving at the port. As a result, the Transitionalauthorities are estimated to collect a staggering 13,201,944,000 riyals per month from fuel levies. Additionally, a charge of 9 riyals per liter is imposed when the fuel is stored in Aden refineries, resulting in a further 8,486,964,000 riyals per month.

During the third quarter of 2021, it is alleged that the "Transitional" authorities managed to accumulate an astonishing sum of 21,688,908,000 riyals from collections at Aden port and refineries. These revelations have sparked concerns about potential financial exploitation and have raised questions about the transparency and legitimacy of these levies. As Yemen continues to grapple with complex challenges, these allegations further fuel debates surrounding financial accountability and the equitable distribution of resources in the war-torn nation.

Exploitation of Checkpoints and Markets

The "Al-Alam Point," serving as the eastern gateway to Aden, has emerged as a lucrative source of revenue for the Transitional Council, according to a recent report. With an average of 40-50 trucks passing through daily, each laden with goods, a levy of 50,000 riyals is imposed on every truck, resulting in monthly revenues of 67.5 million riyals. Furthermore, truck drivers entering the city are subject to a charge of 15,000 riyals.

In Lahj, the Transitional Council has established eight primary checkpoints across the governorate, including Al-Anad Al-Zaytouna, Al-Wataniya, Mizan Al-Mallah, Al-Askariyya, Naqeel Al-Khala, Al-Ar, and Al-Sir. These checkpoints witness the passage of approximately 550 heavy transport trucks daily, originating from the port of Aden. The report indicates that the taxes collected at these checkpoints amount to a staggering 7.095 billion riyals per month. Truck owners are burdened with charges ranging from 50,000 to 150,000 riyals per vehicle, resulting in a cumulative sum of 430,000 riyals per truck.

In addition to these levies, merchants in the governorate of Lahj are also subjected to an additional 3% levy on their revenues, termed "protection fees," which are collected separately from the aforementioned amounts.

Moving to Abyan, the Transitional Council's revenues from royalties amassed from heavy transport trucks reach 20 million riyals per day (equivalent to 600 million riyals per month). Moreover, revenue is generated from transportation buses traveling to and from the Gulf states and the eastern governorates, contributing to the council's financial resources.

The report further estimates that daily revenues from "khat taxes" collected by the Transitional Council range from 100 million to 200 million riyals. Additionally, various "emerging" levies are imposed through active exchange companies engaged in market speculation, benefitting influential individuals within the transitional military and security centers or offering them protection.

Aidros Treasury

The Aidros Treasury serves as the repository for these levies, with funds being channeled into private accounts affiliated with the Southern Transitional Council through local exchange companies or the National Bank in Aden. The report reveals that Aidaroos Al-Zubaidi, Chairman of the Council, issues direct orders for the disbursement of these funds. It is alleged that substantial financial rewards, equivalent to monthly salaries, are disbursed "multiple times" to the Council's forces, which comprise over 70,000 armed men. The directives for such disbursements are estimated to amount to around 7 billion riyals per the directive, and this practice has occurred on multiple occasions.

Living Crisis 

While the Transitional Council amasses significant financial resources through these levies, the people of Aden, Lahj, and Abyan suffer from severe living crises, including electricity shortages, water scarcity, soaring prices, and rampant security chaos. The report emphasizes that the internationally recognized Yemeni government faces hurdles in accessing resources and providing essential services to citizens.

Observers argue that the actions of the transitional authorities hinder the functioning of state institutions, as they prioritize their influence and financial gain over public welfare.

It is crucial to note that the Southern Transitional Council previously waged an armed conflict against the Yemeni government in Aden, which was declared the temporary capital of the country. In August 2019, they expelled the government before eventually signing an agreement in Riyadh. Subsequently, on April 25, 2020, the Transitional Council announced the establishment of "self-administration" in Aden and the southern governorates under their control, effectively sidelining the government. However, the government officially returned following the formation of the Presidential Leadership Council, which included Aidaroos Al-Zubaidi, on April 7, 2022.