Lifting subsidies and tightening tax collection: The Iraqi government approves a new package of economic decisions.
Lifting subsidies and tightening tax collection: The Iraqi government approves a new package of economic decisions.
2026-08-19
Shafaq News – Baghdad
On Tuesday evening, Prime Minister Ali Faleh Al-Zaidi chaired the fifteenth regular session of the Council of Ministers, which witnessed a discussion of the latest developments in the general situation in the country, a review of the files on the agenda, and the adoption of a number of necessary decisions and measures regarding them.
The Prime Minister’s Media Office stated in a statement received by Shafaq News Agency that, as part of the government’s measures to increase export and import capacities, the recommendation regarding the purchase of crude oil was approved, based on the price of the State Oil Marketing Company (SOMO) or the price set in the general budget, whichever is lower, with a discount of (30%), to be determined annually, starting from September 1, 2026, and paid to the public treasury, provided that its financial effects are reviewed in detail, with the implementation of the aforementioned study being based on lifting subsidies on the prices of petroleum products for all sectors, with the exception of the main products supplied exclusively to citizens (gasoline, gas oil, kerosene, and liquefied gas) from September 1, 2026.
He added that “any support granted to any sector reduces the share of the public treasury, and the proposed mechanism will be presented to the Federal Board of Financial Control for the purpose of adopting the amended accounting policy to avoid future audit observations.”
In the oil sector as well, the council voted, according to the statement, to approve the mechanisms for exporting Iraqi oil through specialized international and local companies, and through different outlets, provided that the contracts are for a period of (3) working months starting from September 1, 2026.
The recommendation regarding exceptional approvals to increase export and import capacities was also approved, authorizing the Minister of Oil to create additional transport routes for the contracts concluded and currently in force, and the authority to renew those contracts, in addition to authorizing him to approve the import of petroleum products when needed to ensure the stability of their supply and prevent crises, provided that the Oil Pipelines Company completes the work of expanding the loading platforms.
The statement indicated that the council approved the commencement of work before signing the contract for the projects to rehabilitate the (IT2A) station and a supporting unloading station for the (IT1) station with a capacity of (300,000 barrels/day) in a way that ensures the speed of preparing imported raw materials, and in a way that does not affect the principles of competition and transparency.
Regarding the procedures for regulating oil sales mechanisms, the Council approved the recommendation related to the mechanisms for advance payment of the prices of Iraqi oil sales, and the methods for companies purchasing the value of shipments to deposit, and advance payments into the relevant accounts belonging to the Ministry of Finance and the Central Bank of Iraq.
He explained that the Council also approved the continuation of payments to the Basra Gas Company for the value of its products delivered to the South Gas Company, as it is a self-financing company, and that Cabinet Resolution (308 of 2026) be amended, in addition to approving the donation of the Ministry of Oil, with an amount of 5 billion dinars to the Ministry of Health, allocated for the purchase of medicines, medical and laboratory supplies.
In the electricity sector, the statement confirmed the approval of the recommendation of the Central Review and Approval Committee for Referrals at the Ministry of Electricity, regarding the adoption of Request for Proposals (RFP) documents in the electricity distribution sector.
According to the same statement, the Council approved the adoption of the principle of prepayment of customs duties and estimated tax deposits on imported goods, starting from October 1, 2026. The importer is required to deposit the foreign exchange transfer funds for import purposes with authorized banks, and these funds will not be transferred until the importer has paid the estimated customs duties and tax deposits through the ASYCUDA system and approved electronic payment mechanisms, and transferred them to the public treasury accounts and the relevant accounts at the Ministry of Finance, within (15) days.
He continued: “The calculation of customs duties and estimated tax deposits shall be based on the initial data provided by the importer, including the commercial invoice, shipping documents, or import and customs classification, type of goods, their origin and value, in accordance with the approved customs tariff schedules.”
As part of the government’s efforts for administrative and financial reform, the Council voted to amend the instructions for regulating write-off procedures and accounting treatments, which include sending all government entities the minutes of write-off of debts and assets to the Federal Financial Control Bureau for auditing before the decision to write off is taken by the authorized entity, and the Ministry of Finance amended the instructions for regulating write-off procedures and accounting treatments (1 of 2022) to ensure the aforementioned amendment, according to the statement.
The Cabinet approved the Ministry of Transport/Air Navigation Company funding the Ministry of Finance with an amount of 15 billion dinars, allocated to border crossings, to develop the infrastructure of the Rabia, Al-Walid and Safwan crossings, in addition to suspending the implementation of Cabinet Resolution (963 of 2025) until the end of 2026, provided that the local market is monitored during the suspension period.
The statement concluded by saying that “the Council voted to approve the extension of the Independent High Electoral Commission’s occupancy of school buildings until December 31, 2027, provided that the Commission submits a plan that includes time limits for vacating the occupied classrooms and school buildings in stages. The Minister of Trade or his designee was also authorized to negotiate and sign the draft agreement for economic, trade, scientific, cultural, artistic and sports cooperation between Iraq and the Republics of Nigeria and Zambia.”
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