Taxes in Syria, Episode Three: The Unseen Burden of Indirect Taxation

As highlighted in the April and May 2025 issues of Syria in Figures, the Syrian Interim Government (IG) is working to overhaul the national tax system. This article concludes the series with a focus on indirect taxes and fees.

Indirect taxes and fees are levied on individuals or institutions but collected through intermediaries (e.g., producers, retailers, or service providers). Built into the price of goods and services, they shift the burden to consumers at the point of purchase, without requiring direct payment to the government. This approach improves compliance by obliging sellers to remit taxes on behalf of consumers and limits evasion, since it targets visible transactions rather than wealth or profit.

Between 2010 and 2024, the state budget listed four indirect taxes imposed on processed materials, agricultural produce, salt, and sugar. However, forecast revenue appeared only for tax on processed materials from 2010 to 2016, and salt from 2017 to 2022. The 2023 and 2024 budgets projected no revenue from any of these taxes. 

Conversely, reliance on indirect fees increased during the conflict. These fees are typically regressive (applied uniformly regardless of income), placing a heavier burden on lower-income households. Yet according to budget data, their share of total revenue rose from 7% in 2010 to 16% in 2024, with nominal revenues increasing a hundredfold. In US dollar (USD) terms, however, indirect fee revenue fell from USD 1.16 billion in 2010 to USD 555 million in 2024. The slower rate of decline, compared to other revenue streams during the conflict, reflects how difficult these fees were to avoid.

Throughout the conflict, customs duties remained a steady and significant source of government revenue. Collected under Customs Law 38 of 2006 and amended through various presidential decrees, they have made up roughly a quarter of forecast indirect fee revenues since 2012. However, these duties are among the few indirect fees prone to widespread evasion through under-invoicing, smuggling, and bribery, costing Syria tens of millions of dollars each year. Since taking power, the IG has abolished ten widely criticized customs fees viewed as corrupt and inconsistent with international norms, signaling a commitment to anti-corruption and customs reform. These changes have also helped lower import costs and, by extension, retail prices.

Stamp duties represent another major source of indirect revenue. Typically paid by affixing a revenue stamp to official documents, they are anchored by the financial stamp duty applied to documents, contracts, and other official papers, governed by Legislative Decree 44 of 2005. Other types include the Martyr Stamp, War Effort Stamp, National Contribution Stamp for Reconstruction, and Engineering Stamp. During the conflict, stamp duties on average contributed about 12% of forecast indirect fee revenues annually. 

The leading forecast revenue source for 2024, however, was the consular fee. Regulated under Law 19 of 2023, consular services are formally priced in foreign convertible currencies—primarily the USD. Fees range from USD 50 to USD 200, with USD 300 for a standard passport and USD 800 for expedited issuance. A 1.5% fee also applies to the value of commercial invoices legalized abroad. Under the Assad regime, where consular fees became a vital revenue stream, many Syrians viewed these charges as extortion, especially amid reports of abuse in consular operations. By 2024, consular fees accounted for 25% of forecast indirect revenues, up from just 5% in 2010. 

As with direct taxes, the indirect tax and fee system requires urgent reform. Customs and import duties, originally intended to regulate trade and protect local industry, have often been used as blunt revenue tools. This has fueled inflation and raised consumer costs. Fees on Luxury Consumer Expenditures are applied too broadly, with little distinction between essential and non-essential goods. For example, levies on mobile phones and telecom services exacerbate inequality. 

One of the most critical structural gaps is the absence of a modern, broad-based Value Added Tax (VAT), despite earlier regime claims it would be introduced in 2024. VAT is globally favored for its efficiency, resistance to evasion, and neutrality across supply chains—it collects revenue without distorting production decisions.

Targeted excise taxes, particularly on tobacco and alcohol, could further improve equity if revenues are directed toward public health.

Looking ahead, post-conflict tax policy must shift from short-term revenue extraction to long-term development and fairness. This means easing the burden on essential goods, taxing luxury consumption more heavily, and adopting policies that are fiscally sound and socially just. Strategically, building a fairer, more transparent tax system will be vital to restoring public trust and supporting both economic and social resilience.