The new exchange rate is a “double shock”… An economic proposal to freeze customs tariffs for a year
The new exchange rate is a “double shock”… An economic proposal to freeze customs tariffs for a year
2026-10-08
Shafaq News – Baghdad
On Thursday, Manar Al-Obaidi, head of the “Iraq Future” Foundation for Economic Studies and Consultations, called on the Council of Ministers and the Parliament to take a temporary economic measure for one year to mitigate the effects of adjusting the dinar exchange rate on commodity prices and to protect commercial and industrial activity from recession.
Al-Obeidi proposed, in a statement received by Shafaq News Agency, freezing the provisions, schedules and rates of the amended Customs Tariff Law No. 22 of 2010 for a period of one year, and resuming during the transitional period the mechanism of Coalition Provisional Authority Order No. 38 of 2003, which adopts a unified fee of 5% of the customs value of the imported goods covered, instead of the current multiple and high rates of tariffs.
He also called for obligating the Ministry of Finance and the General Authority of Customs, immediately upon the amendment taking effect, to issue a unified schedule and instructions for all border crossings, in order to prevent differences in application between them and to ensure clarity of cost for traders and importers.
He suggested that the measure be limited to 12 months, with a review after six months to measure its impact on inflation, prices, import activity, revenues and industrial activity, with the normal tariff to be reinstated after the end of the period or reassessed according to the results of the review.
Al-Ubaidi said that changing the dollar purchase price from about 1300 to 1500 dinars raised, according to his estimate, the dinar equivalent per dollar by about 15.4%, considering that the state had indeed obtained an important additional financial space from adjusting the exchange rate.
He added that applying high customs tariff rates in conjunction with the new price means that the imported goods bear two effects at the same time, namely the rise in the price of the dollar and the rise in customs tariff, indicating that their effect is transferred to varying degrees to the cost of food, medicines, factory inputs, machinery, spare parts and transportation, all the way to the consumer.
He pointed out that the commercial sector faces the risk of declining demand and rising capital requirements for import financing, while the industrial sector faces rising prices for raw materials and imported components.
Al-Ubaidi stressed the need to ensure that addressing the state’s financial imbalance, in his view, does not turn into double pressure on the citizen and the private sector, noting that protecting Iraqi industry and agriculture does not necessarily mean imposing high tariffs in general on thousands of goods.
He explained that the Iraqi Products Protection Law can be activated to protect local products in a targeted manner when they are exposed to dumping, foreign subsidies, or harmful increases in imports, instead of imposing high fees on all goods and consumers.
Al-Ubaidi concluded by saying that the exchange rate decision gave the public treasury a larger dinar resource, considering that it is natural for it to be met with a measure that reduces the burden on the citizen and the private sector, while warning against using the exchange rate and customs tariff at the same time as two tools to increase state revenues, which would burden the citizen and the market with the cost of both tools together.
It is noted that the warehouses of merchants and shops in the Al-Shourja market, and “Alwa Jamila”, and a number of money exchange and transfer companies closed their doors yesterday, Wednesday, following the Iraqi Central Bank’s raising of the official exchange rate of the US dollar against the Iraqi dinar from 1320 dinars per dollar to 1520 dinars.
shafaq.com
