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Al-Shabaab levies zakat tax on charcoal

September 19, 2011

The recent report from the U.N. monitoring group on Somalia and Eritrea describes one of the many revenue sources of economic powerhouse al-Shabaab as a 2.5 percent tax on coal.

Let’s see—2.5 percent for producers, 2.5 percent for transporters, 2.5 percent for workers…  I’m sensing a pattern.  But golly gee, what’s the significance of 2.5 percent?  As detailed as their report is, the U.N. doesn’t spell out the fact that 2.5 percent is equal to one-fortieth, which is the rate set for the zakat tax by the Hadith and the Profiteer Muhammad.

Islamic law also applies the same 2.5 percent rate as a customs duty against articles of trade by Muslim merchants.  Al-Shabaab is carrying out Sura 106 of the Koran and the precedent set by Caliph Umar in so doing.

With the firm Islamic context in mind, here are some of the findings from the U.N.:

Table: Tax figures for charcoal production in Al-Shabaab controlled areas in April 2011

  • “Local charcoal producers pay a ‘production tax’ of 2.5%, in return for which they receive production ‘certificates’. The charcoal is transported to port on trucks, whose owners are also required to pay a tax of 2.5% of the estimated value to Al-Shabaab. In addition, if stopped at a checkpoint, truck owners pay a checkpoint fee per truck (Annex 3.2.a and 3.2.b). Failure to pay taxes can lead to seizure of the consignment and/or imprisonment…”
  • “The owners of barges that carry the charcoal from Baraawe to offshore vessels pay a tax of 2.5% of the estimated value of their cargo. While smaller boats are charged $0.5 per sack of charcoal. Porters employed for loading and discharging charcoals must also pay 2.5% of their salaries to Al-Shabaab…”
  • “Some privileged companies are permitted to export charcoal tax free, using green colored sacks reserved exclusively for Al-Shabaab-approved enterprises. These sacks are not available for purchase on the local market, and are usually sourced in Dubai, the UAE.”
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2 comments

  1. […] on Afghan agricultural (not just poppy) harvests, and al-Shabaab’s 2½ percent zakat tax on the Somali charcoal trade.  These are major revenue sources upon which these wealthy jihadist groups rely for two […]


  2. […] See prior Money Jihad coverage of how the Somali charcoal trade benefits al-Shabaab here, here, and here. […]



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