An economic observatory warns: The external borrowing law weakens Iraqi state revenues and opens the door to corruption.
An economic observatory warns: The external borrowing law weakens Iraqi state revenues and opens the door to corruption.
2026-09-05
Shafaq News – Baghdad
The Economic Observatory “Eco Iraq” criticized on Saturday the proposed borrowing law that the Iraqi parliament is seeking to legislate, warning of its impact on non-oil revenues as well as opening the door to corruption and unfair competition.
The observatory said in a statement that “the draft law prepared by the parliamentary finance committee, which consists of 9 articles, grants the cabinet the authority to borrow externally up to a maximum of $5 billion per case,” adding, “It also grants the finance minister the authority to borrow up to $2 billion, while anything beyond that requires the approval of parliament.”
He pointed out that “the law includes exempting lenders from taxes and customs duties on their projects,” considering that this may “weaken revenues and open the door to bringing in materials outside the scope of projects under the cover of exemptions.”
According to the observatory, “the exemptions create unfair competition with Iraqi companies and contractors who pay taxes and fees in full.”
The proposed “Borrowing, Grants and Subsidies Law” for 2026 stipulates allowing external borrowing to finance strategic projects, with all loans, bonds, grants and donations provided by donors for ongoing and new projects being exempt from taxes and customs duties.
It also allows the Minister of Finance to issue payment or debt guarantees for government contracts in an amount not exceeding 5 trillion dinars annually, provided that the “take or pay” formula is not used in electricity contracts, with the exception of solar power plants.
The parliamentary committee attributed the reasons for the legislation to the delay in the revenue shortfall, the government’s difficulties in financing public spending, and to ensure financial sustainability and facilitate the financing of necessary expenditures.
shafaq.com
