While most countries around the world strive to create a stable investment environment that encourages industrialists and merchants to establish new ventures, Syria is confronting an exceptional phenomenon that has emerged as a primary barrier to attracting investors. This phenomenon is the reassessment and recollection of taxes for previous fiscal years that had already been settled, and for which business owners had obtained tax clearance, which was supposed to conclude all their tax obligations.
A number of industrialists and merchants told +963 that this unprecedented measure came as a shock, reducing their motivation to reinvest or expand their activities. They feel trapped in an endless cycle of repeated financial burdens affecting their investments and their ability to hire workers.
Testimonies from Industrialists and Merchants
Mohammad Ali, owner of a textile factory in Damascus, told +963: “I paid the taxes for 2020 to 2022 and obtained a clearance, but now they are demanding a reassessment with additional amounts exceeding two billion Syrian pounds. How can I even think of expanding the factory or hiring 50 new workers? This kills any investment ambition.”
Mohammad al-Khaled, a building materials trader in Aleppo, added to +963: “After closing the accounts, I received a notice of previous taxes due to ‘reassessment.’ This forced me to reduce my activity by 40 percent and lay off workers. An investor seeks stability, not a financial trap.”
A member of a chamber of industry stated: “No country reinstates taxes after granting clearance. This is unique to Syria and drives away foreign investment, which had been promoted with supposedly low tax rates ranging between 10 and 15 percent.”
The Impact on the Investment Climate and Employment Opportunities
Economic expert Mohammad al-Abed told +963 that “reimposing taxes on previously settled years places investors before renewed and unpredictable financial risks, which explains the reluctance to establish new factories or workshops. This directly affects job opportunities for the unemployed and weakens the national economy’s ability to increase production and achieve development.”
He added: “While some countries operate under transparent and clear tax systems that do not allow for tax reviews after closure, the Syrian case stands as an exception. This creates an environment of legal and economic uncertainty. It reflects a structural flaw in the tax system and a lack of governance and transparency mechanisms in tax collection. It also raises legal and ethical questions regarding taxpayers’ rights and investor protection.”
Al-Abed concluded that reforming this system and adopting clear and encouraging tax policies is an urgent necessity to revive investment and achieve tax justice. This requires the authorities to put an end to the policy of ‘reassessing taxes for settled years’ so Syria can regain its competitiveness in attracting investment and supporting the national economy.
A Systemic Flaw That Undermines Trust
Despite the tax reforms announced by the Syrian Ministry of Finance to simplify the system and attract investment, the continuing practice of reassessing taxes for settled years remains a major obstacle for industrialists and merchants, raising questions about the effectiveness of these reforms in building trust.
Economic expert Mahmoud Addai confirmed to +963 that no country in the world reimposes taxes on traders or industrialists after they settle their financial obligations and obtain tax clearance. This phenomenon exists only locally. He added that the success of any tax reform depends on governance and transparency; however, the absence of these elements deepens uncertainty and prevents the attraction of capital, especially with the tax burden reaching 52 to 55 percent of GDP in some periods.
Economic analysis shows that this practice increases tax evasion and reduces production. The complexity of the system hinders private investment and reconstruction, which requires between 250 and 500 billion dollars. The heavy tax burden weakens growth and employment opportunities. While some propose periodic reassessments every five to six years, these should exclude previously settled cases. Reassessing settled taxes effectively supports competing imports at the expense of national production, which reduces the competitiveness of the local industry, increases demand for the dollar, raises its price, increases unemployment, reduces demand for national products, and ultimately leads to business closures, according to Addai.
He added: “From all of this, we conclude the necessity of genuine reform with private sector participation in committees to ensure fairness that boosts production and employment, rather than driving people out of work, while also attracting foreign direct investment.”
