Iraq streamlines tax collection to boost revenues and accelerate budget reforms

Iraq’s finance ministry has signed an agreement with the Federal Board of Supreme Audit to accelerate tax reconciliations, aiming to increase non-oil revenues and enhance fiscal efficiency through digital tools and legal measures.

Iraq’s finance ministry has agreed with the Federal Board of Supreme Audit to speed up tax reconciliations in a move aimed at lifting non-oil revenues and protecting state funds, according to a ministry statement reported by local outlets. The arrangement is designed to reduce delays in settling tax accounts for bodies under audit, including mixed-sector companies and private colleges, universities and institutes.

Under the new approach, the General Tax Authority will be able to collect taxes owed once a taxpayer submits financial statements, rather than waiting for the final audit to be completed, provided the audit board is notified and given a copy of the filings. The ministry said the change is intended to clear a backlog of unfinalised years and create a more efficient system for bringing in revenue.

The ministry has also said that legal measures will be enforced against entities that delay or refuse to submit their accounts, citing Iraq’s income tax law and the state debt collection law. Separate explanations from the ministry, carried by Erem Business and INA, say tax receipts are first placed in a special account at the Central Bank of Iraq before being transferred to the state’s final revenue account once assessment is complete, in line with the rules in force.

The broader policy fits the finance ministry’s stated aims of improving budget management, expanding revenues and using more digital tools in public finance, according to information on its own website. In practice, officials are trying to balance quicker cash collection with the need to complete formal audits, a trade-off that could help the government capture income sooner while still preserving oversight.