‘Misinterpretation’ of budget law blocking KRG salary payment: Deputy minister

ERBIL, Kurdistan Region - Misinterpretation of the federal budget law is the main reason behind the Iraqi government not sending enough money to pay the salaries of employees in the Kurdistan Region, Iraq’s deputy finance minister said on Monday, as tensions between Erbil and Baghdad over the Region’s financial entitlements linger. 

“The interpretation of the Iraqi finance ministry for the budget law is not an accurate one,” Masoud Haider, Iraq’s deputy finance minister told reporters. He also called on the ministry to not connect the salaries of the Kurdistan region employees to other matters.

“The salaries of people of Kurdistan are 775 billion dinar monthly according to the law … and it is the responsibility of the Iraqi finance ministry to pay them,” he said, adding that the ministry’s accounting department has made a mistake. 

Last week, Baghdad said it would send Erbil 500 billion Iraqi dinars (close to $382 million) to cover public servant salaries. Days later, the federal finance ministry announced it would be signing a loan agreement with the Kurdistan Regional Government (KRG) to pay salaries of employees.

Iraq passed its highly contentious budget bill for the years 2023, 2024, and 2025 in June, which includes a record $152 billion in spending, of which the Kurdistan Region’s share is 12.6. 

The phrase “actual spending” in the budget law describes the amount of money Iraq spent or earned throughout a specific fiscal period. 
“The salaries of the [Kurdistan] Region's employees have no connection with actual spending... some people within the Iraqi government release false numbers,” he said.

The KRG Council of Ministers on Wednesday called on Baghdad to pay Erbil’s financial entitlements according to figures previously agreed upon so that salaries can be paid timely and without interruptions. 

“Baghdad must send the financial dues of the Kurdistan Region monthly according to the budget of one trillion and 375 billion dinars, of which 906 billion dinars are allocated for salaries so that the Kurdistan Regional Government can pay the salaries,” the KRG said in a statement.

On Friday,  Iraqi government spokesperson Basem al-Awadi stated that Baghdad had “fully implemented its financial obligations” towards Erbil, adding that the funds owed by the Kurdistan Region amounted to more than three times the Region’s share in the Budget Law.

Meetings between delegations from the KRG and the federal government have been ongoing over the past months, aimed at resolving lingering disputes over the Region’s share in the federal budget.

Haider said that he would send a formal letter to Iraqi Prime Minister Mohammed Shia’ al-Sudani in which he presents the “facts” about the law, saying that he has been given wrong information.

The KRG has failed to pay its civil servants on time and in full for several years due to the financial crisis. Public sector employees have not been paid for the months of July and August following several failed deals with Baghdad.

As talks and negotiations between the Iraqi government and the KRG delegations continue over the budget, the Region’s employees are still waiting to receive the salaries for the months of July and August.