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ERBIL, Kurdistan Region — New taxes are to be imposed on a variety of companies operating in the Kurdistan Region, according to a decree issued on Monday by prime minister Masrour Barzani.
The 11-point decree, whose main focus is the imposition of taxes and customs on different sectors in the Kurdistan Region, has to be implemented within the next 60 days, according to the document.
Kamal Tayyib, the Director of the General Directorate of Tax and Public Properties said in a press conference on Monday that the decree could be considered to be part of an anti-corruption law passed last year.
The directorate has filed court complaints against 100 companies that have failed to pay their taxes, Tayyib said.
The prime minister has asked the ministry of transportation and finance to “set out the procedures to impose 20 percent tax on internet companies in the Kurdistan Region, same as companies in other parts of Iraq”, according to the statement from the prime minister’s office.
Similarly, telecommunication companies such as Asiacell, Korek, and Zain will have to pay sales taxes for operating in the Kurdistan Region.
The decree also includes taxes on advertising firms, tourist attractions, four and five-star restaurants and hotels, and an income tax on private sector employees.
In response to the decree, Zirak Biko, head of the Erbil Hotels and Restaurants Association told Rudaw’s Rozhan Abubakir on Monday that the decision will deal a further blow to hotels already dealing with low occupancy rates amid the coronavirus pandemic.
“Only a few four and five star hotels are working at the moment, the ones that host delegations and officials. Some of them don’t even have ten rooms booked,” Biko said.
“We ask that the government looks into which hotels and restaurants are actually working, and base their imposition of tax on that.”
Companies and people that do not abide by the decree will face legal consequences, according to the decree – though the decree did not state what those consequences would be.
Ali Abdulrahman, the deputy director of the General Directorate of Tax and Public Properties, told Abubakir that his directorate has set the wheels of the tax imposition in motion.
Tayyib told Rudaw in 2017 that of nearly 25,000 companies registered in the Kurdistan Region, only 13,000 of them pay corporate income tax.
Prime minister Barzani has vowed since the beginning of his premiership to root out corruption and maximize government revenues.
Amid contention between Erbil and Baghdad over the Kurdistan Region’s share of the federal budget, the KRG has struggled to pay the salaries of civil servants – sparking popular protests that were met with deadly repression.
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