KRG introduces new tax system for the private sector in Kurdistan

ERBIL, Kurdistan Region (Kurdistan 24) – The Kurdistan Regional Government (KRG) has implemented a new tax system for private sector employees in the Kurdistan Region for the first time.

The KRG is implementing a new taxation system which levies 5 percent of private sector employees' salaries in the Kurdistan Region.

The Deputy General Director of the Tax Directorate at the Ministry of Finance told Kurdistan 24 the new arrangement was part of the government’s reform platform at the Ministry which includes employees from the public and private sectors. 

The KRG will collect 5 percent from employees whose salary is more than one million Iraqi Dinars (around 790 USD), and the decision also includes foreign workers, he said.

According to a Kurdistan 24 reporter, the plan was supposed to be introduced in April but was postponed to the month of July. If properly implemented, the KRG could collect 50 billion IQD annually.

Izzat Sabir, a member of the Economic and Finance Committee in the Kurdistan Region's Parliament, told Kurdistan 24 the decision was "wise and legal," claiming the plan should have been implemented by the government 25 years ago.

KRG officials say the Kurdistan Region's economy has been mainly affected by cuts in the Iraqi budget which began in 2014, the sharp decline in global oil prices, the war against the Islamic State (IS) and the burden of hosting 1.8 million Internally Displaced Persons (IDPs) and refugees.

Editing by G.H. Renaud