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SEPTEMBER 2020

Tax Evasion Sparks Conflict Between Syrian Government And Assad’s Billionaire Cousin

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A corruption crisis is developing between the government and the country’s top tycoon Rami Makhlouf, a cousin of President Bashar al-Assad.

The crisis began in April, when the Syrian Communication Ministry demanded the Makhlouf-owned Syriatel and MTN, the only mobile operators in the country, to pay more than $130 million as a tax return to “balance” their licenses.

Makhlouf, unexpectedly, reacted by releasing a public video and accusing the government of injustice. In the same video, he promised to pay off the taxes.

Hoewever, a deadline set by the communication ministry passed without Syriatel paying. In what appears to be a response, the authorities arrested several Syriatel executives as well as managers linked to Makhlouf’s businesses.

Makhlouf criticized the arrests in a second, bolder video believed to be filmed in his mansion in Damascus. He blamed security agencies in the country warning the government of consequences for its behavior. The tycoon also repeated his promise to pay the taxes.

In spite of these promises, no payments were made by May 17, when Makhlouf released a third video on his Facebook page.

Makhlouf claimed in the video that the authorities would release his employees if he pays $185 million and resigns as head of Syriatel. Once again, he said he is ready to pay the fee. However, he stressed that his position in the company is a “red line.”

Tax Evasion Sparks Conflict Between Syrian Government And Assad’s Billionaire Cousin

Rami Makhlouf in May 17 video.

He said that Syrian authorities are “demanding we forfeit our company’s profits” and hand over “120 percent of the profits to the state or else we will be arrested”.

“Whoever thinks I will resign under these conditions, doesn’t know me,” France 24 quoted Makhlouf as saying.

The Ministry of Communication responded to Makhlouf’s third video by saying that the dead line for payment has passed. The ministry warned that it will be taking legal action.

“We hold Syriatel all legal and operational consequences as a result of its refusal to restore the rights it owes to the state … And we affirm that we will take all legal measures to collect these rights and recover the money by possible legal, legitimate means,” a statement by the ministry reads.

Mainstream media outlets speculate that the sitaution with Makhlouf indicates that the ‘bloody Assad regime’ is collapsing. In their view, the push of the government to impose the law and order in the economic sphere is something ‘wrong’ that goes contrary to ‘democratic values’.

The Syrian economy is currently passing through a major crisis, with the price of the Syrian pound dropping almost on a daily basis. The crisis, which is the result of a harsh sanction pressure and the long war, apparently motivated the Damascus government to find additional ways to optimize the country’s economy.

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