Baghdad Sent Only 41% of Kurdistan Region’s Financial Entitlements: KRG Report

ERBIL (Kurdistan24) — The Kurdistan Regional Government’s (KRG) Department of Media and Information on Monday released a detailed report showing that the Iraqi federal government transferred only 41 percent of the Kurdistan Region’s legally approved financial entitlements between 2023 and 2025, despite clear provisions in the federal budget law.

According to the report, a copy of which was obtained by Kurdistan24, Baghdad sent just 24.3 trillion Iraqi dinars (IQD) to the Kurdistan Region out of a total entitlement of 58.3 trillion IQD over the three-year period, leaving a substantial shortfall that has directly affected salaries, public services, and development projects.

The findings are based on figures covering the implementation of Iraq’s Federal General Budget Law, approved on June 21, 2023, which spans fiscal years 2023, 2024, and 2025.

The law was adopted following extensive negotiations and understandings between delegations from the KRG and the federal government.

Budget law commitments unmet

Under the budget law, the Kurdistan Region’s share was conditioned on the submission of non-oil revenues in line with the Financial Management Law and the delivery of produced oil to the State Organization for Marketing of Oil (SOMO) or the federal Ministry of Oil. In return, Baghdad was obligated to transfer the Region’s full financial share as stipulated in the legislation.

However, the report states that despite these legal commitments, the federal government failed to fully disburse the approved amounts throughout the three-year budget cycle.

During the same period, Iraq’s total federal budget amounted to 622.632 trillion IQD. The Kurdistan Region’s full entitlement of 58.3 trillion IQD represents a modest portion of that total, yet only a fraction was actually transferred.

The 24.3 trillion IQD sent to the Region accounts for just 41 percent of Kurdistan’s financial rights under the law and only 3.9 percent of Iraq’s overall federal budget during those three years, according to the report.

No investment funding transferred

One of the most striking findings highlighted by the KRG Department of Media and Information is the complete absence of federal funding for investment and infrastructure projects in the Kurdistan Region.

Despite an allocation of 12.5 trillion IQD for investment spending in the Region over the three-year period, the report confirms that Baghdad transferred zero dinars for this purpose. The lack of investment funding has led to the suspension or disruption of numerous service and infrastructure projects, further straining the Region’s economy and public sector.

KRG officials have repeatedly warned that the failure to honor budgetary commitments undermines financial stability, delays development, and places additional pressure on the Region’s ability to meet its obligations to public employees and citizens.

The report highlights the Kurdistan Region’s continued commitment to adhering to the federal budget law while exposing Baghdad’s persistent failure to meet its legal and constitutional obligations, underscoring a clear gap between the Kurdistan Region’s financial rights and the funds actually transferred despite the existence of a binding federal budget framework.

Below are the details of Funds Sent to the Kurdistan Region According to the Report:

Year 2023

Following the approval of the Budget Law, the Kurdistan Region's share for 2023 was 16,497,871,089,000 IQD. However, the federal government sent only 4,698,000,000,000 IQD, most of which was provided as loans.
This total only covered five months' worth of salaries. Meanwhile, the KRG distributed nine months of salaries that year—the other four months were funded by internal revenues and oil revenues from the first three months of 2023. Consequently, three months of salaries for Kurdistan's public servants for the year 2023 remain unpaid by the federal government.

Year 2024

In 2024, the Region's share according to the budget law was 20,910,463,950,000 IQD. However, the total funds provided for salaries in 2024 amounted to 10,709,736,357,000 IQD (after deductions for pensions and taxes). The federal government sent 10,026,445,000,000 IQD, while 683,291,000,000 IQD was covered by internal revenues to complete salary payments.

The funds sent by Baghdad covered only 10 months of salaries. One additional month was funded by the KRG’s internal revenue, leaving one month of 2024 salaries unpaid by the federal government. This occurred despite Erbil and Baghdad reaching an understanding on non-oil revenues; from mid-2024, over a period of five months, 399,168,961,500 IQD was deposited into the Federal Ministry of Finance's account at the Central Bank of Iraq’s Erbil branch.

Year 2025

In 2025, the federal government sent 9.6 trillion IQD for salaries, all of which was used for distribution. This occurred while the Region's budgeted share for 2025 was 20.9 trillion IQD. The amount sent represents less than 50% of the entitlement stipulated by the law.

The total expenditure for the Region by the federal government in 2025 was 10,414,555,154,731 IQD. After deductions totaling 814,486,145,690 IQD (for pensions, income tax, stamp duties, job numbers, and 3% pension loan repayments), the net amount sent for salaries was 9,599,971,607,631 IQD, covering 10 months.

According to the minutes between the KRG Finance Ministry and federal representatives, the salary allocation for 2025 was set at 13,334,587,000,000 IQD, yet only 9.6 trillion IQD was actually sent. Thus, the federal government sent only 45% of the Region's 2025 share, covering only 10 out of the 12 months of the year.

Monthly Funds Received from the Federal Government for Salaries (2025):

Jan: 958,012,332,759 IQD
Feb: 957,925,862,078 IQD
Mar: 954,880,507,780 IQD
Apr: 959,514,309,106 IQD
May: 974,813,045,475 IQD
Jun: 1,007,352,199,128 IQD
Jul: 956,936,732,490 IQD
Aug: 945,817,430,551 IQD
Sep: 941,874,188,271 IQD
Oct: 942,845,000,000 IQD
Nov: 0 IQD
Dec: 0 IQD

Total: 9,599,971,607,631 IQD

Details of Non-Oil Revenue Sent to Baghdad:

According to the Budget Law, the Kurdistan Region must hand over its non-oil revenues to the Iraqi General Treasury. Specifically, 50% of federal revenues must be sent monthly. Below is the schedule of non-oil revenues sent by the KRG:

Jan-Apr: Varied between 48B and 51B IQD.

May-Oct: 120,000,000,000 IQD per month.
Total Sent: 919,346,211,877 IQD.
 
Iraq’s Excuses for Withholding the Kurdistan Region’s Share:

Year 2024

Despite budget approval and agreements to resume oil exports, the Federal Ministry of Finance continued to find excuses to withhold funds:

Salary List Issues: Baghdad demanded lists in Arabic, then quadruple names, then mothers' names. The KRG Finance Ministry complied with all these requests.

UPN and Biometrics: Baghdad then demanded Unique Personal Numbers (UPN) and biometric codes. The KRG provided this data for all employees except approximately 600 individuals who are on long-term unpaid leave, mostly residing abroad.

Monthly Trial Balance: Baghdad requested monthly financial reports. The KRG has been providing these since 2023, and they have been audited on-site by joint teams from the Federal and Regional Boards of Supreme Audit.

Audit Teams: Baghdad requested that federal audit teams visit Erbil to verify reports; the KRG facilitated full access to resolve the salary issues.

Liquidity Issues: Despite meeting all demands, the Federal Ministry created "liquidity issues" in the last three months of 2024, failing to send full funding and only covering 10 months total for the year.

Year 2025

At the start of 2025, a new round of excuses began:

Unified Pension Law: Baghdad demanded the implementation of the Unified Pension Law in the Region. This led to the simultaneous retirement of 30,000 employees born between 1962 and 1964.

Halting Increments and Hiring: While Baghdad has hired hundreds of thousands of employees elsewhere, it hasn't approved new positions for the Region since 2013. In 2025, it halted all transfers, salary increments, and hiring until the 2026 budget.

Lack of Financial Allocation: In May 2025, Baghdad again claimed a lack of allocation due to oil sales issues, though this was later resolved via agreement.

Non-Oil Revenue Demands: Baghdad shifted from demanding 50% of non-oil revenue to 100%. To protect people's livelihoods, the KRG showed flexibility and agreed to hand over 120 billion IQD monthly, despite the heavy strain this puts on the Region's operational expenses and projects.

Oil Exports:

Following a two-year halt, an agreement was reached between Erbil, Baghdad, and international oil companies. Oil exports resumed, with the sales process handed over to SOMO.
Salary Localization (Banking): Baghdad raised the issue of "Tawteen" (banking salaries).

The KRG had already initiated the "My Account" (Hezhmarî Min) project. After demonstrating that "My Account" offers more advanced services and lower costs than the federal system, the excuse was dropped. Currently, over 90% of public servants are registered in the project.