[size=30]Why do politicians fuel hostility to taxes in Iraq?!
[ltr]2021.10.02 - 10:30[/ltr]
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[size=20]Iraq lacks an interesting tax culture, in terms of laws and politics, as well as the Iraqi people and citizens who believe that taxes are nothing but government "revenge" and robbery of rights.
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Since the beginning of the modern political system after 2003, there have been changes in tax laws with the aim of reforming them in response to the constitution and the need to advance the country's economy. However, observers and specialists believe that these changes, which were represented in reducing the income tax rate and increasing legal allowances, are far from "reform", as Successive governments neglected the tax file, unaware of its necessity and its effective role in building an economic foundation for the country. Certainly, the abundance of oil and the relatively high price per barrel enabled the post-2003 governments to obtain the money that almost fills the need, and facilitates them to cross the government period of 4 years without reaching the state of "economic handicap".
However, life in general has become more complicated, and it is not surprising that the value of oil collapsed, and with it the Iraqi economy, which the current government described as "fragile." This fragility might have been less, and the basics of the economic situation in Iraq might have been more solid, if officials in the governments that passed had shown little interest in a file such as taxes, and perhaps the economic crises would have been less difficult.
A report prepared by the Federal Integrity Commission identified "a number of negative cases represented by weak management of some joints in the General Tax Authority, and assigning the management of some branches to people who lack the necessary experience and qualifications, which negatively affected their work, as well as the large number of transfer orders and change of departments within a short period of time, Then canceling some of them later, for unjustified reasons.
The report also pointed out that the auditors surveyed confirmed the spread of bribery cases in a large number of tax departments, the complexity of procedures and the deliberate delay in completing transactions, for the purpose of blackmailing auditors and forcing them to pay bribes, and that the phenomenon of similarity of names still constitutes a major entry point for blackmail.
The report also pointed out that the auditors surveyed confirmed the spread of bribery cases in a large number of tax departments, the complexity of procedures and the deliberate delay in completing transactions, for the purpose of blackmailing auditors and forcing them to pay bribes, and that the phenomenon of similarity of names still constitutes a major entry point for blackmail.
This report proves that one of the factors that stand in the way of economic reform is the rampant corruption in the tax file in Iraq, starting with border crossings and ports responsible for customs and incoming and outgoing taxes. According to the customs tariff law, which the government was forced to implement, in order to reduce the financial deficit in the general budget, and according to what the General Customs Authority announced, it obtained (400 billion dinars / 306.5 million dollars) during six months of 2016, but this amount is very small. In comparison with the imports of the private sector, where the Central Bank of Iraq had announced that external remittances and documentary credits for the imports of the private sector were not less than 30 billion dollars in 2016, and given that the customs tax rate is not less than 10%, it is necessary that the value of customs revenues reach up to $1.5 billion during the first six months of the same year. This simple example illustrates the extent of corruption in the Iraqi tax system over the years.
On the other hand, the current Iraqi government headed by Mustafa Al-Kazemi, has focused since its inception on addressing what has been corrupted, starting with Al-Kazemi issuing a series of orders to change officials at the border crossings in particular, leading to the presentation of the most comprehensive and scientific white paper.
Based on the awareness of the need to work on the tax file, which can contribute significantly to saving the Iraqi economy from collapse, the current Finance Minister, Ali Abdul Amir Allawi, confirmed his ministry's efforts to prepare a draft of a "new tax law", considering that the current law is not commensurate with the Iraqi circumstance. , especially that the rates of taxes imposed are "low".
He explained that "the percentage of taxes collected is 1% of the state's national product during the past year, which is a very small percentage," stressing that "the assumed property tax rate is 9% of the estimated property price, while the tax on transfer of ownership is progressive, from 3% to even 6% of the property value, and the income tax rate is 15% of the net profit.
In mid-August of this year, Allawi sponsored a conference in the capital, Baghdad, aimed at reforming the country's tax system.
Where the conference discussed "the feasibility of applying the tax system in Iraq, real estate tax, government contracts tax and direct deduction, in addition to the axis of income tax on oil licensing companies, the salary tax for private and public sector employees, the tax of mobile phone companies, business and currency auction taxes."
He explained that "the percentage of taxes collected is 1% of the state's national product during the past year, which is a very small percentage," stressing that "the assumed property tax rate is 9% of the estimated property price, while the tax on transfer of ownership is progressive, from 3% to even 6% of the property value, and the income tax rate is 15% of the net profit.
In mid-August of this year, Allawi sponsored a conference in the capital, Baghdad, aimed at reforming the country's tax system.
Where the conference discussed "the feasibility of applying the tax system in Iraq, real estate tax, government contracts tax and direct deduction, in addition to the axis of income tax on oil licensing companies, the salary tax for private and public sector employees, the tax of mobile phone companies, business and currency auction taxes."
On the other hand he assured Allawi that the Ministry of Finance proceeding towards the application of its reform policy and tax being one of the most important strategic objectives set out in the white paper, noting that the ministry attaches great importance in the introduction of global technology and modern digital systems by automating tax work fully. "
Indicates confirmation The Minister of Finance indicated that one of the most important factors that stand in the way of controlling rampant corruption in the tax issue is the lack of electronic systems that facilitate monitoring and enforcement of laws, as well as increasing productivity in this sector.
The importance of tax reform in any country lies not only in achieving higher revenues for the state to finance the state’s public expenditures, but extending it further to achieve complete economic reform, as taxes are a primary means in the government’s hands to encourage, sustain and revitalize the investment reality and provide new job opportunities among young people. That there be economic reform and attract investment without a modern tax system that keeps pace with the economic development in the world.
In this regard, Minister Allawi discussed the aspect of tax exemptions on investment projects as one of the incentives to attract investors and expand the base of promising development opportunities.
Indicates confirmation The Minister of Finance indicated that one of the most important factors that stand in the way of controlling rampant corruption in the tax issue is the lack of electronic systems that facilitate monitoring and enforcement of laws, as well as increasing productivity in this sector.
The importance of tax reform in any country lies not only in achieving higher revenues for the state to finance the state’s public expenditures, but extending it further to achieve complete economic reform, as taxes are a primary means in the government’s hands to encourage, sustain and revitalize the investment reality and provide new job opportunities among young people. That there be economic reform and attract investment without a modern tax system that keeps pace with the economic development in the world.
In this regard, Minister Allawi discussed the aspect of tax exemptions on investment projects as one of the incentives to attract investors and expand the base of promising development opportunities.
Although the idea of developing and modernizing the tax system seems theoretically positive and promising for the Iraqi economy, the continued political rejection based on the personal interests of politicians could constitute a major challenge for the current government, as the Minister of Finance confirmed that the economic reform program represented by a series of applications within the white paper may be "Painful" for the Iraqi citizen, but its positive results appear in the long run, and they are necessary measures to reduce the risk that Iraq and the Iraqi citizen may go through in the future.
This is what prompts other political parties to take advantage of the street’s refusal to promote their electoral programs by attacking and rejecting these proposals, especially since they are accustomed to short-term plans that guarantee them a parliamentary seat for 4 years, without paying any attention to what comes after.
This is what prompts other political parties to take advantage of the street’s refusal to promote their electoral programs by attacking and rejecting these proposals, especially since they are accustomed to short-term plans that guarantee them a parliamentary seat for 4 years, without paying any attention to what comes after.
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