BAGHDAD, Iraq – As the Kurdistan Region awaits the payment of arrears from Baghdad, the Iraqi finance minister said the country is facing a serious cash shortfall and is looking to introduce property, car and travel taxes.
Finance Minister Hoshyar Zebari, himself a Kurd, said that the Kurdistan Region will start to receive its monthly budget as soon as the Iraqi parliament approves the 2015 budget.
“Based on the Baghdad-Erbil agreement Kurdistan’s budget will not be delayed from now on,” Zebari told Rudaw.
But he explained that Baghdad is currently facing serious cash shortages: it is short 25 trillion dinars to make up the 125 trillion dinars that the country needs for 2015.
He added that the Iraqi government is pondering the introduction of a tax system “in order to raise domestic revenue, and people should learn to pay taxes,” and that the proposal bas backed by Prime Minister Haidar al-Abadi.
“There will be car, property and even travel tax,” he said. “Eighty percent of Iraq’s money goes to salaries and the rest goes to investment and projects,” he added.
Zebari said that Baghdad still owes the Kurdistan Region the budget of at least 10 months of this year that was blocked by the government of former prime minister Nouri al-Maliki, and that it has become a complicated issue now.
The finance minister predicted that next year will be a difficult year for Iraq’s finance, mainly to the falling oil prices which makes up more than 95 percent of Iraq’s revenue.
Constitutionally, the autonomous Kurdistan Region is entitled to 17 percent of the Iraqi budget. But those payments have remained frozen for most of this year due to a row over independent Kurdish oil exports.
