Iraq Newsletter - Spring 2018

Iraq’s 2018 Federal Budget: Key features and trends

Iraq’s parliament approved the 2018 federal budget on 03 March 2018 after amendments were made by the parliamentary finance committee to the original bill submitted by the government.  Key takeaways from this budget include cuts to security and defence spending; greater investment in the electricity and health sectors; and an important change to how allocations to the Kurdistan region are calculated.

Total spending is up by 3.5% compared to last year at 88 Billion Dollar.

The Budget confirms the continued application of the following taxes and levies:

  • Sales tax on mobile and internet recharge cards at a rate of 20%
  • Sales tax on restaurants and hotels in accordance with the provisions of the Revolutionary Command Council Resolution No. 36 of 1997
  • Airport tax equal to 25,000 Iraqi dinars (US$21) levied on airline tickets for international flights and 10,000 Iraqi dinars (US$8) levied on airline tickets for domestic flights
  • A penalty of 200% for the importation of alcoholic beverages levied at the entry ports

One the most controversial changes to this year’s budget was the decision to scrap the KRG’s longstanding fixed share of 17% and opt for per capita spending in line with the other Iraqi provinces. While there is no mention of the revised figure of 12.67% within the budget law, the KRG’s share of spending for fuel imports, medicines, and food rations do indeed equate to 12.67%.

The full Budget is available in Arabic on the Iraqi Parliament’s website.