A new government directive requires importers to pay customs duties and taxes upfront on goods destined for Houthi-controlled areas, aiming to block the militia's revenue generation from dual taxation.
The National Committee for Regulating and Financing Imports has issued a decision mandating the advance collection of state customs duties and taxes on goods imported through ports under Houthi control. This measure is designed to prevent the Houthi militia from levying their own charges on these same goods. The Chamber of Commerce and Industry in Aden circulated the directive to traders and companies on Wednesday, establishing a new procedure that obligates importers to settle their state customs and tax obligations before finalizing their external financing for imports.
Under the new regulation, relevant authorities are tasked with collecting all legally stipulated customs duties, taxes, and other revenues on imported goods arriving at Houthi-controlled ports. The process of foreign exchange and transfers will be contingent upon the full settlement of these dues according to established rates and amounts. The decision empowers revenue authorities to calculate and collect these payments, requiring importers to provide official proof of payment. External financial transfers will only proceed after verification that all necessary requirements have been met.
This action is part of broader governmental efforts to enhance oversight of import financing flows, bolster public revenues, and curtail the Houthi militia's ability to profit from trade and import financing through areas under legitimate government jurisdiction. The decision is anticipated to increase the government's customs and tax revenue, particularly given the continuous flow of goods into Houthi-controlled territories via their controlled ports, at a time when the government faces escalating economic and financial challenges.
The significance of this decision is underscored by the Houthi authorities' ongoing practice, for over eight years, of imposing and collecting customs duties on goods entering their territories from areas controlled by the legitimate government. This allows the militia to benefit from trade-related revenues, even when a portion of these goods has already undergone customs procedures in government-controlled areas. The new ruling reopens the issue of dual customs collection, which imposes additional burdens on importers, traders, and consumers amidst the continuing economic and monetary division and the multiplicity of authorities levying fees and taxes on goods circulating within the country.
Linking foreign transfers to the settlement of government dues is viewed as a crucial regulatory and financial tool aimed at tightening control over the import financing cycle. It seeks to strengthen the government's capacity to collect legal revenues in opposition to the system of levies imposed by the Houthi militia on commercial activities.
