Iraq increases taxes amid public discontent
The Iraqi government has increased non-oil revenues by imposing a sales tax to get $1.8 billion this year.
The Iraqi government sent to parliament a revised version of the 2018 budget bill for the fourth time Feb. 11. The budget proposal includes a new 10% tax on sales at commercial centers, restaurants and barbershops.
Iraq lacks the appropriate environment to collect new taxes because sales are made in cash, not credit cards. This reality will likely impose obstacles on tax collection as both citizens and shop owners can find ways to evade taxes. This is not to mention the influence peddling in the tax collection departments, where some officials could add the taxes to their personal accounts instead of state coffers.
The government's new tax policy comes as a result of Iraq's 2015 agreement for a $5.4 billion loan with the International Monetary Fund.
This deal includes a reform of public finances (including the tax system) to collect 2.3 trillion dinars ($1.8 billion) under the 2018 budget through taxes imposed on telecommunications services, hotels, refreshments, cigarettes and alcohol, among other items.
