EconSource: ISIS Made $11 Million Per Month in Iraq Province

The Islamic State (ISIS or ISIL) made $11 million per month from “organized crime” in Iraq’s Nineveh province before seizing Mosul in June of last year, a parliamentary report obtained by AFP says. ISIS members acted like “mafias managing organized crime” and controlled “all the economic resources of the province,” said the report.  ISIS had “a specific system for collecting money” and imposed “specific rates” on different social groups as part of its highly successful racketeering. The report cited various examples of “taxes” levied by ISIS, including on petroleum products being transferred from a major refinery in neighboring Salaheddin province, which brought in about $1 million per month. “Everyone was paying Daesh [ISIS], even the vegetable sellers,” the report said, adding that the funding was “a major economic resource that helped in a fast and efficient way to entrench this terrorist organization and double its human and logistical capabilities.” [AFP, 8/19/2015]

Egypt to lower top tax rate and threshold, freeze capital gains tax within two weeks
Egypt will lower the top tax rate and threshold for companies and individuals in high income brackets and freeze a 10 percent tax on capital gains within two weeks, Finance Minister Hany Dimian said. The moves are aimed at attracting investors and boosting the country’s economy. “We await the issuing of amendments lowering the income tax ceiling to 22.5 percent as well as amendments to the capital gains tax within a few days; one or two weeks at the most,” Dimian said. The government announced the decision to lower the top tax rates in March, but it has yet to be signed into law by President Abdel Fattah al-Sisi. In May, the government said it would freeze the capital gains tax, reversing part of its economic reform agenda, but the freeze has also not been signed into law. [Reuters, 8/20/2015]

Egypt, Saudi Aramco sign $1.4 billion oil products deal
Egypt has agreed to a three-month oil products deal worth $1.4 billion with Saudi Arabia’s state-owned Aramco. The deal will begin in September and stipulates that Egypt pay Aramco within a year, Oil Minister Sherif Ismail said. Financial support from Gulf states such as Saudi Arabia has helped Cairo keep its economy afloat and ease an energy crisis. [Reuters, 8/20/2015]

Tunisia’s economic growth slows sharply in Q2 after militant attacks
Tunisia’s economic growth slowed sharply in the second quarter of 2015 to 0.7 percent year-on-year, official data showed on Wednesday, after two militant attacks crippled the country’s tourism industry. The economy had expanded 1.7 percent in the first quarter of 2015 compared to the same period a year earlier. Strikes and protests have also disrupted the country’s phosphate exports. Tunisia cut its gross domestic product growth forecast to 0.5 percent this year, down from an initially expected 3 percent. The government expects the budget deficit to narrow to 5 percent of gross domestic product in 2015 from 5.8 percent last year. [Reuters, 8/20/2015]

Libya’s GNC outlines subsidies reform plan
Deputy Speaker of the Tripoli-based General National Congress (GNC) Awad Abdulsadiq said that the western government has agreed to reduce fuel subsidies and provide cash payments in place of subsidies on basic goods. “The GNC has voted to remove subsidies from all types of fuel, including petrol, diesel and [refined] oil, with the exception of [bottled] natural gas,” he said. Each citizen will receive LD50 ($40) per month in place of subsidies on staple foods and fuel. The GNC added that citizens must first receive two months worth of support (LD100) before any subsidies are removed. [Libya Monitor (subscription), 8/20/2015]

Also of interest
UAE July inflation rises to 4.4 percent, highest since Feb 2009 | Reuters
Egypt approves $1.75 billion maintenance deal with Siemens | Ahram Online
Egypt’s market continues to fall, hits lowest record in a year | Ahram Online
Egypt’s Ezz Steel says output hit by foreign currency shortages | Aham Online
Egypt’s cabinet approves establishing authority for Suez Canal zone | Ahram Online
Egypt among five countries most likely to default on debt | Mada Masr
IMF executive board concludes 2015 article IV consultation with Iraq | IMF
Iraq oil exports drop to weigh on OPEC output in August | Reuters
Militant threat to spur cost of Iraq eurobond experiment | Bloomberg
Libya’s NOC plans twenty-four hour petrol stations | Libya Monitor (subscription)
Turkey’s deepening turmoil sends currency to record low | Bloomberg