KRG: Baghdad Sent IQD 41 Trillion of IQD 146 Trillion Owed Over 12 Years

ERBIL (Kurdistan24) - Over 12 years, the Kurdistan Region should have received about IQD 146 trillion under Iraq’s federal budget laws. The federal government transferred only IQD 41 trillion, according to a special report released on Saturday by the Kurdistan Regional Government’s (KRG) Department of Media and Information.

The report, covering 2014 to 2025 and prepared in coordination with the KRG Ministry of Finance and Economy, says annual transfers averaged just 2.04% of Iraq’s total federal budget.

The Region’s allocated share was set at 17% from 2014 to 2017, then cut to 12.67% from 2018. Federal Ministry of Planning figures cited in the report put the Region at 14.14% of Iraq’s population in 2024, a proportion that was not reflected in federal budget transfers, which averaged just 2.04% of Iraq's total annual budget over the period covered by the report.

The shortfall is most visible in salaries. The report says the IQD 41 trillion transferred was enough to cover only 46 months of public-sector salaries out of a total of 144.

That is roughly four years of payroll, leaving the equivalent of eight years without matching federal funding.

The KRG says this contributed to prolonged financial difficulty and repeated disruptions to salary payments.

The year-by-year figures show sharp swings. The report says no funds were transferred in 2016 or 2017. Transfers of IQD 2.28 trillion in 2014 and IQD 2.4 trillion in 2015 each covered three months of salaries.

In 2018, the Region's budget share was reduced from 17% to 12.67%, while the IQD 2.8 trillion transferred covered three months of public-sector salaries.

In 2019, IQD 5.3 trillion covered six months, and no federal budget law was enacted in 2020, with public expenditure instead governed by the Financial Management Law. The IQD 2.1 trillion transferred covered public sector salaries for three months.

In 2021, IQD 1.2 trillion covered one month of public-sector salaries. In 2022, no federal budget law was enacted, with public expenditure again governed by the Financial Management Law.The IQD 400 billion transferred covered one month of salaries.

Transfers rose to IQD 4.6 trillion in 2023, covering five months, then to IQD 10 trillion in 2024, covering 11 months, and IQD 9.5 trillion in 2025, covering 10 months.

The report says the federal budget laws introduced from 2015 onward were adopted without KRG consent.

It says they counted only Kurdistan Region public-sector salaries in the calculation of actual expenditure, and that the number of sovereign expenditure items rose from 10 to 100.

It adds that this was when the KRG began exporting oil independently, to protect citizens’ livelihoods and ensure salaries were paid on time.

One of the key issues affecting the Kurdistan Region's share of Iraq's federal budget is the way sovereign expenditures are calculated and deducted.

The Region is required to contribute 12.67% toward these expenditures. However, the report argues that the federal government's method of calculating this contribution inflates the amount charged to the Kurdistan Region, as illustrated by the federal budgets for 2023–2025.

In the 2023–2025 budget law, sovereign expenditure accounts for about 23% of the general budget, or IQD 142.3 trillion over the three years.

Applying 12.67% to that total gives about IQD 18.1 trillion. The report proposes applying the same rate to the IQD 78.8 trillion remaining after sovereign expenditures are excluded, which gives about IQD 9.9 trillion.

The difference is IQD 8.2 trillion over three years, or roughly IQD 2.7 trillion annually.

According to the report, under the federal government's calculation method, the Kurdistan Region's contribution to sovereign expenditures is therefore almost twice the amount calculated using the proposed alternative.

Despite those contributions, the report says no allocation reaches the KRG Ministry of Peshmerga Affairs from sovereign funds assigned to Iraq’s Ministry of Defence.

It says the Region also receives nothing from funds designated for servicing Iraq’s domestic and foreign debts.

Across the 12 years, it says, the Region contributed more than IQD 65 trillion to sovereign expenditure while only IQD 41 trillion dinars have been transferred to the Kurdistan Region.

Furthermore, no funds from the sovereign expenditure budget have been allocated or transferred to the Kurdistan Region.

REPORT FINDINGS

The following tables demonstrate that the Kurdistan Region's financial difficulties have not resulted from a failure to fulfil its obligations. Rather, they reflect a series of financial obstacles and constraints that have substantially reduced the funds available to the people of the Kurdistan Region

The report concludes that the federal government failed to fulfill its obligations under the budget laws, cut the Region’s share without clear justification, and still did not transfer even the reduced allocation. It also points to the draft federal budget for 2027, which sets the Region’s share at 12.70%, below the 14.14% population figure from the 2024 census.