UN urged to mount pressure on Al Houthis to transfer state revenues to the central bank in Aden
Al Mukalla: The Yemeni government has urged UN special envoy to Yemen to mount more pressure on Al Houthi militants to transfer state revenues to the central bank in Aden, and warned that it might not be able to pay salaries to public servants who live in rebel-held territories.
In a letter carried by the state-run Saba news agency, the internationally-recognised Yemeni government told Esmail Ould Shaikh Ahmad that the rebel movement continues to squander revenues from state bodies inside their territories and use the money to fund their military efforts.
If Al Houthis do not immediately send the revenues to Aden, the government will face a liquidity crunch and will be unable to send government salaries to Al Houthi-controlled provinces, the government warned.
The government deposited all revenues from Aden and Al Mukalla seaports, border crossings, taxes on telecom and cement companies and other state bodies into the central bank in Sana’a at the beginning of the war in order to pay government salaries.
But in September, the Aden-based government accused the Iran-backed rebel group of squandering more than $4 billion of the central bank reserves.
The militant group also attempted to access millions of dollars in hard currency reserves held by banks overseas.
In response, Yemeni president Abd Rabbo Mansour Hadi relocated the central bank to Aden and fired the bank’s governor Mohammad Bin Hamam.
Economists say the rebel movement racks up to 1 trillion riyals ($1=330 Yemeni riyals) from government and private institutes based in the capital.
Mustafa Nasser, a Yemeni economist, told Gulf News on Monday, that Al Houthis collected more than 1 trillion riyals last year.
“They collected more 500 billon Yemeni riyals from tax on big telecom companies and banks profits and charges on goods imports. They got another YR400billion from taxes on fuel imports only,” Nasser said.
“Most big companies are based in Sana’a and are forced to pay their taxes to Al Houthis,” he said.
The stubborn rebel movement is unlikely to respond positively to the appeal and the government will need to think of alternative ways to bring in revenues to Aden, Nasser said.
Nasser suggests that the government could look to taxing goods coming into the Hodeida seaport once they have liberated it from Al Houthis.
Another option would be to boost taxes on goods that enter Yemen from various seaports under government control.
The government will soon run out of cash if it measures are not taken immediately, he warned.
Hadi has recently begun paying public servants who joined the payroll before the Al Houthi coup in 2014.