A dispute that will extend until 2024.. Baghdad’s eyes are on funds from Kurdistan that cover 37% of the salaries of its employees
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Baghdad today - Baghdad
There are many problems facing reaching any comprehensive agreement between Baghdad and Erbil, especially with regard to the region’s share of the budget and financial obligations between the two parties.
While Baghdad and Erbil reached an agreement regarding the delivery of oil or oil revenues to Baghdad, the problem of non-oil revenues appears as a new obstacle between the two parties. While Baghdad waits for the region to hand over all its financial revenues in exchange for obtaining its share of the budget, the region believes that this agreement applies to oil and revenues. Oil revenues only. As for non-oil revenues from fees, taxes and customs, only 50% must be delivered to Baghdad and not all revenues.
Director of the Kurdistan Customs, Samal Abdul Rahman, said today, Wednesday (December 13, 2023), in an interview with “Baghdad Today” that “according to the budget law, the region must hand over 50% of the revenues, but the Iraqi government demands that the full 100% be handed over to Baghdad.” Then it returns 50% to the region.”
He added, "This matter violates the budget law, which stipulates that only 50% be delivered, and therefore we have fully adhered to the law."
He pointed out that "the region's revenues from customs border crossings range approximately between 110 billion dinars to 150 billion dinars per month."
In the same context, member of the Kurdistan Democratic Party, Wafa Muhammad Karim, in an interview with “Baghdad Today”, today, Wednesday (December 13, 2023), confirms that the issue of non-oil revenues was on the table of the last meeting that took place between Prime Minister Muhammad Shia’ al-Sudani and the region’s delegation. Chaired by the Minister of Interior.
Karim said in an interview, “Baghdad is demanding that 100% of border customs revenues be handed over, even though the region handed over 50% of the revenues to Baghdad.”
He added, "Baghdad is demanding impossible conditions for the purpose of sending the region's share of the budget, and this is what led to the failure of reaching an agreement between the two parties, and the Prime Minister of the region, Masrour Barzani, rejected the agreement and sent a message to Muhammad Shiaa al-Sudani in this regard."
These disputes indicate the continuation of the crisis of financial obligations between Baghdad and Erbil, while the fate and salaries of the region’s employees for the last three months of the current year remain unknown, with the advent of the new year and the start of implementation of the previously voted 2024 budget, which indicates the continuation of this crisis until next year.
While the average revenues from border crossings in the region are between 110 and 130 billion dinars, this means that they amount to more than 1.5 trillion dinars during the years. With other non-oil revenues from income taxes and other internal fees, the non-oil revenues of Kurdistan in total amount to more than 4 trillion dinars. per year, according to data from the Kurdistan Region Ministry of Finance.
As for oil revenues, they amount to more than 900 billion dinars per month, which means more than 10 trillion dinars annually.
Thus, Baghdad obtained 75% of the Kurdistan region’s revenues through oil, while Kurdistan received 25% of its revenues, which are non-oil revenues.
In contrast, the Kurdistan region's share of the budget amounts to more than 20 trillion dinars within a year.
While the region says that it needs only 900 billion dinars per month for salaries, this means that the Kurdistan region’s non-oil revenues are able to cover 37% of the salaries of its employees.
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