The internationally recognized Yemeni government has issued firm directives prohibiting the collection of any illegal levies or fees at security and military checkpoints throughout the liberated governorates, threatening deterrent punitive measures against any entity or military commander who violates these instructions. This government move comes in response to repeated public and business demands to end the financial chaos that burdens citizens and hinders domestic trade.
The context of the economic crisis and the challenges of a “war economy”
This move comes at a time when Yemen is suffering one of the world's worst humanitarian and economic crises, a consequence of the conflict that has raged for over nine years. The collapse of state institutions and the fragmentation of the financial system have led to the emergence of what is known as a "war economy," where numerous security and military checkpoints on roads connecting the governorates have become illegal tollbooths, imposing exorbitant fees on commercial transport trucks.
Economic reports indicate that these illegal levies have caused a crazy rise in the prices of food and basic commodities, as traders and transport companies are forced to add the costs of these levies to the final price of the product, thus doubling the suffering of the Yemeni citizen who is already facing a decline in purchasing power and a collapse in the value of the national currency (the Yemeni riyal).
The importance of the decision and its impact on the private sector
This decision is of paramount importance to the private sector in Yemen, which has long complained about double taxation and unjustified fees imposed by multiple entities without legal basis. The implementation of this decision is expected to contribute to:
- Reducing transportation costs: Removing financial barriers to truck traffic between ports and major cities.
- Price stability: Reducing additional costs may have a positive impact on the stability of food and consumer goods prices.
- Boosting confidence: An attempt to restore the confidence of international donors and financial institutions in the government’s ability to control revenue streams.
Security challenges and the need for strict implementation
Despite the widespread welcome for these directives, observers point out that the biggest challenge lies in their implementation on the ground, given the multiplicity of military and security formations. In this context, the government affirms its commitment to unifying security and financial decision-making, emphasizing that revenue collection must be exclusively through official state channels, represented by the Ministry of Finance and relevant revenue authorities, and that any collection outside of this framework constitutes a crime punishable by law.
Through these measures, the government seeks to maximize the state’s public revenues to enable it to meet its obligations to pay employee salaries and improve deteriorating public services, in light of resource scarcity and the cessation of oil and gas exports.
