Displaced Sunni people, who fled the violence in the city of Ramadi, arrive at the outskirts of Baghdad, April 17, 2015. Reuters

In the 11 months since the Islamic State group declared a caliphate across vast swaths of Syria and Iraq, the people living under its control have contended with ceaseless horrors, from near-daily public executions, harsh punishments for minor crimes and airstrikes from an American-led coalition. Beyond these terrors, communities under the control of the militants, also known as ISIS or IS, now find themselves forced to finance the operations of the jihadist regime: They are being compelled to pay what they describe as exorbitant surcharges for the basic necessities of life, from electricity and water to bread and waste removal.

“It’s expensive now. The cost of living is really high,” Abu Ibrahim al Raqqawi, a spokesman from Raqqa is Being Slaughtered Silently, told International Business Times via Skype.

The effectiveness of the ISIS leadership in extracting resources from local people poses a substantial challenge to the American-led multinational coalition fighting to contain and destroy the Muslim militants. A successful U.S. special forces raid inside Syria last week reportedly killed the man in charge of the Islamic State group’s oil revenues -- a crucial artery of cash. The coalition has unleashed airstrikes and financial sanctions to bar ISIS from cashing in on the vast crude oil and natural gas reserves within its domain. But the stories of ordinary people living within ISIS territory highlights the fact that the militants have effectively diversified their sources of finance: They are tapping the pockets of the people they rule.

“There were claims many months ago that coalition airstrikes had significantly disrupted ISIS' oil and gas business,” said Aymenn Jawad Al-Tamimi, a fellow at the Middle East Forum. But there are “plenty of other avenues for IS to make revenue too that are much more difficult to disrupt.”

This account of ISIS’ aggressive efforts to squeeze revenues out of the households inside the caliphate is based on written rulings released by the group’s various media houses in Iraq and Syria and from anecdotal evidence recounted to International Business Times by anti-militant activist group Raqqa Is Being Slaughtered Silently.

ISIS administers the territory it controls across Iraq and Syria, which it has divided into 19 wilayats, or provinces, each with its own military and administrative branches. Each wilayat has an administrative unit called Diwan al-Khidamat, or “service administration,” responsible for providing public services to civilians -- but it does not provide them for free. And the money people pay for those services goes right into the pockets of ISIS.

“One of ISIS’ biggest financial resources is the taxes it imposes on the citizens of Raqqa,” according to a report from the anti-militant activist group Raqqa Is Being Slaughtered Silently.

When ISIS leader Abu Bakr al-Baghdadi declared a so-called caliphate across Iraq and Syria last June, “its goal was to create a Muslim society with all the trappings -- food aplenty, industry, banks, health care, social services, pothole repair -- even a nursing home with the insurgents’ unmistakable black flag draped over the walls,” according to “ISIS: State of Terror” by J.M Berger and Jessica Stern.

But whatever services ISIS does provide, it charges for, something that many Syrians aren’t used to after living for decades under the authoritarian regime of the Baath Party, which offered, for example, free healthcare.

In al Mayadeen, a Syrian city in the partially ISIS-controlled province of Deir el Zour, ISIS has put the cost of a Caesarean birth at 15,000 Syrian pounds, nearly $80, while a regular delivery costs the equivalent of roughly $55, according to a statement released in November from the medical administration of ISIS’ al Khayr province. That’s an immense sum in an economy where the gross domestic product per capita is just around $1,700.

Residents of Raqqa line up to receive food, May 3, 2015. Raqqa Is Being Slaughtered Silently

ISIS provides Internet access, too. In Raqqa, the number of Internet cafes in the city has increased from 20 to about 500 under ISIS rule. Internet in the province is completely powered by satellites, as the Syrian regime shut down network connection nearly two years ago. Now “there is internet even on the streets,” said a report by Raqqa Is Being Slaughtered Silently. While this may seem like a boon, it does not look so great when considering that ISIS charges 100 pounds, about 50 cents, for every 25 megabytes -- an enormously high price compared to Western averages for Internet access.

“This kind of trade is one of the most profitable trades for ISIS,” the report said of the group’s monopoly on Internet access.

Prices for the electricity and phone services also monopolized by ISIS are less extortionate -- every household in Raqqa and Deir el Zour is required to pay 800 pounds a month for electricity and 400 for the phone -- but what they buy is shoddy: as of January, people had only four to eight hours of electricity a day.

In Mosul, the Iraqi headquarters for ISIS, the availability of electric power has been even worse for residents since the Iraqi government cut the city from the national grid when the militants took over. That’s helping create an exodus of refugees whose flight may eventually endanger ISIS finances more than military defeats, since it’s depriving the group of the people it fleeces.

The “ISIS state model is largely proving a socio-economic failure for the inhabitants of Mosul and Ninawa province,” al Tamimi said. “By most standards of quality of life ... things are much worse now than during the era of central government control.”

Though there is still a large population in Mosul and surrounding areas that supports ISIS, more than 3 million Iraqis have been displaced since ISIS entered Iraq. Most of them come from the Anbar and Ninawa, ISIS’ two strongholds in the country, according to the Internal Displacement Monitoring Center.

Last week, al Baghdadi spoke in a rare audio recording, urging Iraqi Sunnis who had fled ISIS-controlled territory and settled as refugees in Shiite- and Kurdish-dominated areas to return to the so-called caliphate. People who flee the rule of the Islamic State group not only make ISIS look bad but also remove a key source of income.

“This is a significant concern for ISIS, because it wants to at least give the appearance of prosperity,” said Harleen Gambhir, a counterterrorism analyst at the Institute for the Study of War. “The population is a major source of income for ISIS, and it also serves as the target for ISIS’ brutal governance, by which it justifies its legitimacy.”

ISIS makes money off residents even without the ability to provide stellar public services through extortion, taxing and fining people for breaking its strict rules.

Waste must be removed from every house and business in Mosul in order to avoid a hefty 25,000 Iraqi Dinar ($21.30) fine, and ISIS is the only one who can remove it. Each household must pay a monthly fee of 2,000 Iraqi dinars for ISIS garbage removal services, and businesses must pay 5,000 Iraqi dinars a month, according to a statement released by the group’s Ninawa Province media office.

“Considering Mosul’s large population size, this form of revenue is hardly insignificant for ISIS,” Al-Tamimi wrote.

Even in Raqqa, where public services are much better than in Mosul, extortion is still a large source of ISIS’ income. Municipality laws state that shop owners must not display goods outside their store, on the sidewalk or any public street. They must also adhere to ISIS' undefined “cleanliness standards.” Any violation of these rules would result in at 10,000 dinar fine. These rules are just a few of a dozen listed on the statement issued by ISIS’ Public Services Committee for Raqqa.

Sanctions like the ones listed above, and other more serious violations like failing to close businesses during prayer time, smoking or listening to music, used to be dealt with by “either torturing or lashing,” according to a report from Raqqa Is Being Slaughtered Silently, the anti-militant activist group. “Now you can avoid all this by paying a certain amount of money.”

And, just as much as harsh governance and daily extortion, economic mismanagement that leads to mass migration may prove to be the undoing of ISIS rule.

The cost of bread in Raqqa, an agricultural province where crops are plentiful, is one example. Since ISIS seized power last year it has risen fivefold and has reached a record, local sources said. Residents used to travel to neighboring towns where they could buy flour and make bread at home, but the rising cost of living in the provincial capital has made even that impossible for many families.

“The recent increase has come to overburden civilians,” according to the activist group’s report. “The price is so high compared to the limited income of many families already suffering from poverty.”