The Islamic State’s revenue has been cut by almost 30 percent in the past year as it has lost control of territory and people to tax a new report estimates.
Militant leaders have introduced new fines and taxes to halt the slide in funding and have begun accepting money from criminals in lieu of meting out brutal corporal punishments.
Income for the extremist movement once called the richest terrorist group in the world fell from around $80M each month in March 2015 to $54M last month.
The finances of the Islamic State in Iraq and Levant (Isil) have been badly hit by battlefield reverses in which it lost nearly a quarter of the territory it seized to set up a self-styled Caliphate in Eastern Syrian and northern Iraq.
The number of people living in Isil held territory has fallen from around nine million at the start of 2015 to fewer than six million, denying the militants millions in tax income.
The estimate from consultancy IHS appears to back claims from the international coalition fighting Isil that a barrage of air strikes has badly weakened the militants. Col Steve Warren, spokesman, said at the weekend that strikes had killed up to 25,000 fighters.
Around half the group’s revenues come from taxation and confiscation, and 43 per cent from selling and smuggling oil from captured wells, the reports estimates. Both sources have been hit.
“The Islamic State has lost about 22 percent of its territory in the past 15 months,” said Columb Strack, senior analyst at IHS. “Its population has declined from around nine million to around six million. There are fewer people and business activities to tax; the same applies to properties and land to confiscate.”
The militants have introduced new levies and fines to try to fill their coffers. Taxes have been introduced for lorry drivers, installing satellite dishes and exit fees for anyone trying to leave a city.
Ludovico Carlino, senior analyst, said: “Our research has found that the Islamic State is increasing taxes on basic services and coming up with new ways to get money from the population.
“You can be fined for driving on the wrong side of the road and for not being able to answer questions correctly on the Koran.”
A campaign of US and UK air strikes against Isil’s oil wells and refineries has cut the movement’s income from oil by a quarter.
1,000 jihadists a year head to Europe
As many as 1,000 jihadists are entering Europe each year, a senior Tory has warned, as he said the continent faced massive security problems from the Syrian civil war.
David Davis called on the West to draw up a plan to rebuild the shattered country as part of efforts to end the conflict.
Vladimir Putin has assured the Syrian dictator, Bashar al Assad, that the Kremlin will not let him lose the five year-long war, meaning the only possible outcomes to the bloodshed were a regime victory or negotiated deal, he said.
Mr Davis, who recently visited Damascus to meet Assad, told the BBC: “He said Putin said ‘we will not let you lose’, which for me was the most important phrase of the entire visit because that actually defines what the outcomes are going to be.
«If the Russians will not let them lose, then there are two possible outcomes, the jihadist victory, which would be a disaster in my view by the way, the jihadist victory is not on the cards. Either a negotiated outcome or a Syrian victory is on the cards.»
One respected charity operating in Damascus had told him that none of the rebel groups fighting the Assad regime could be considered moderate, he said. he had been told by a charity in Damascus.
Fear of extremist jihadist groups taking over the country had solidified support in the dictator, he said.
Mr Davis said that the charity had told him that «if Assad stood for election tomorrow he would win» because people «are terrified of the alternative».
One of the «most important» moves the West could make would be to draw up a plan to rebuild the war-torn nation, he said.