Houthi militia wages economic war against Yemeni people

In the context of the economic war waged by the terrorist Houthi militia against the Yemeni people and the legitimate government, which would double the poverty rates in the country, the militia claimed that it would offer reductions in customs fees to merchants who import through the Hodeidah ports under their control, hoping to double the levies it collects for the sake of its war effort.

Allegations of a blockade

Despite the Iranian-backed militia's allegations of a blockade on the port of Hodeidah, its leaders said that they decided to reduce 49 percent of the customs tariff fees for traders and businessmen who intend to import goods by container through the port of Hodeidah, in addition to providing other advantages and facilities in the port, which operates 24 hours to serve importers.

Away from this contradiction between the allegations of the blockade and the recognition of the port working around the clock, observers confirm that the militia’s promises to merchants came in response to the legitimate government’s decision to raise customs by 100 percent on luxury goods that the government says are essentially draining hard currency.

It is noteworthy that the Houthis have established land customs outlets in the borders separating the areas under their control and those under the legitimate government, whereby traders are forced to pay customs on goods for the second time after importers paid these fees at the ports subject to the legitimate government.

On Wednesday, August 11, Yemen’s Supreme Economic Council, affiliated with the legitimate government, urged moving forward with the implementation of the decision to increase customs fees on luxury goods arriving at the country’s ports by 100 percent without granting any exceptions, while stressing that the decision does not affect the basic commodities that are originally exempt from customs.

Earlier, the government had taken its decision No. 7 of 2012 regarding moving the customs dollar exchange rate from 250 riyals to 500 riyals with regard to luxury goods, a decision that sparked a controversy in economic circles.

The meeting of the Supreme Economic Council touched on the positives of the decision on increasing the level of public revenues and its lack of impact on citizens, especially that basic commodities are originally exempt from customs duties, stressing that the implementation of the decision will not entail any burdens on the consumer because it primarily targets luxury goods.

The Supreme Economic Council clarified that the basic commodities exempted from customs duties, including wheat, rice, baby milk and medicines, in addition to flour and oil, will not be affected at all by this decision, and that these measures will not affect the basic livelihood of citizens, pointing to the decision to increase customs on luxuries, which will provide public finances with revenues that contribute to stopping the deterioration of the national currency, improving public services, and regular payment of salaries to state employees.

Tax thieves

The value of tax funds from “large taxpayers” collected by the Tax Authority under the control of the Houthi militia increased from 20 billion riyals per month in 2019 to more than 40 billion riyals per month in 2020, equivalent to more than $66 million per month. The value of other tax funds also increased to more than 20 billion Yemeni riyals, doubling from previous years.

According to the website NewsYemen, the increase in the value of the tax funds collected by the militia is due to the intentional increase in the tax rate they collect, whether from large taxpayers or from other tax bases, by more than 100 percent on some taxpayers or institutions.

Houthi leaders refuse to supply these funds to the interest’s accounts in the central bank in Sanaa and insist on transferring them to unknown accounts or transferring them to investments for the militia and its leaders in several areas, most notably the purchase of land and real estate, as well as the establishment of investments in hospitals, schools and universities, while part of it goes to support the war effort.