Latest Iraq Dinar updates reveal potential currency revaluation, investment law changes, and discussions with the US Federal Reserve, coupled with a giveaway announcement.
Highlights
💰 Currency Payments: Reports suggest payments are rolling out, hinting at possible currency exchange soon.
📜 Investment Law Changes: Iraq’s parliament is discussing amendments to the Investment Law, crucial for economic growth.
🌍 WTO Compliance: Iraq’s currencies are now compliant with international standards for Forex trading.
🔄 Banking Discussions: The Central Bank’s talks with the US Federal Reserve yield positive results for Iraq’s banking market.
📈 Credit Rating: Iraq maintains a B-minus rating, signaling economic stability crucial for dinar revaluation.
🔍 Due Diligence: Readers are reminded to conduct their own research and consult financial advisors.
Key Insights
💵 Payment Rollout: Multiple sources indicate that payments for the currency have begun, which could signal an imminent opportunity for currency exchanges. This could lead to significant market movements in the coming days.
📈 Legislative Impact: The ongoing discussions on the Investment Law are essential for Iraq’s economic landscape, as adjustments requested by the WTO could pave the way for increased foreign investment.
🌐 Global Standards: Iraq’s alignment with international currency standards is a critical step for its financial future, enhancing confidence among investors and traders.
🤝 Central Bank Relations: The positive outcomes from discussions between Iraq’s Central Bank and the US Federal Reserve may stabilize the banking sector, fostering a more robust economic environment.
📊 Economic Stability: Iraq’s sustained credit rating reflects its economic resilience, suggesting that a favorable environment for currency revaluation is developing.
⚖️ Importance of Research: Emphasizing due diligence is crucial as it empowers readers to make informed financial decisions amidst evolving currency news.
Unification of Financial and Accounting Systems between Erbil and Baghdad
The Kurdistan Regional Government (KRG) and the federal government of Iraq have recently taken a significant step towards unifying their financial and accounting procedures. This move, approved by the Regional Council of Ministers, aims to harmonize the financial systems of Erbil and Baghdad while respecting the constitutional status and powers of the KRG.
Background of Financial Discrepancies
Since 2014, the KRG's budget was cut, leading to the development of separate financial systems between Erbil and Baghdad. This situation complicated financial relations and posed challenges for the region's economic stability. The new phase aims to reorganize these relations, which is crucial for both governments.
Impact on Retirees
The unification of financial procedures has brought positive changes for retirees in the Kurdistan region. As of the month of the approval, retirees in the region receive pensions equal to those of Iraqi retirees.
This alignment of pensions has been welcomed by the KRG, which congratulated retirees on this development.
Commitment to Retirees
The Kurdish Prime Minister, Masrour Barzani, has expressed his government's commitment to supporting retirees, acknowledging their contribution to public service. The alignment of pension amounts is a step towards addressing the needs of retirees and ensuring they receive the assistance they deserve.
Challenges in Relations
Despite the positive developments in financial unification, relations between Erbil and Baghdad have faced complications. The finance ministry of Iraq began paying the salaries of the KRG's civil servants in compliance with a recent court ruling.
However, the resignation of a Kurdish judge from the federal court has introduced further complexities.
The judge's resignation was in protest of the court's rulings, which he perceived as undermining the principles of the federal system and impacting the rights of the Kurdistan Region. These developments highlight the ongoing challenges in the relationship between Erbil and Baghdad.
Conclusion
The unification of financial and accounting procedures between Erbil and Baghdad represents a significant effort to streamline financial relations and harmonize systems. While this move has positive implications for retirees and the region's financial stability, ongoing challenges in the relationship between the two governments remain a concern. The commitment of both the KRG and the federal government to addressing these challenges will be crucial for the success of the unification efforts.
The regional government approves the unification of financial and accounting system procedures between Erbil and Baghdad
9/4/2024
The Kurdistan Regional Government approved, on Wednesday, the unification of procedures for financial and accounting systems between the regional government and the federal government, taking into consideration the constitutional specificities of the region and its powers stipulated in the Iraqi constitution.
A statement by the presidency of the regional government, received by Shafaq News Agency, stated that "the regional government held a meeting on Wednesday under the supervision of Prime Minister Masrour Barzani and in the presence of his deputy Qubad Talabani," indicating that "at the beginning of the meeting, Barzani referred in his speech to a number of points such as appointing lecturers on contracts and congratulated them on the occasion of the issuance of a decision to contract with them on internal revenues and hoped that this decision would gain the satisfaction of the lecturers and encourage them to serve the educational and educational process in the Kurdistan Region."
The statement added that "the regional government congratulated the retirees in the Kurdistan Region on the occasion of unifying the salaries of retirees with their counterparts in the federal government and voting on this in the regional Council of Ministers and approving it," indicating that "at the level of the federal government as well, it was possible to reach an agreement and as of this month, the retirees of the region will receive their salaries that are equal to the salaries of retirees in the federal government."
He added, "Barzani reassures the retirees that he will always support their legitimate demands and that this tired part of the Kurdistan Region, which has sacrificed a large part of its life in public service, deserves all support and assistance."
The statement indicated that "Barzani, at the end of his speech, addressed the electoral campaign for the elections scheduled to begin this month, saying that the political parties are free within the internal regulations and instructions issued by the Independent High Electoral Commission on how to conduct electoral campaigns," adding that he asks them to "do so in a civilized manner and away from belittling and defaming others because everyone is a Kurd and a son of this country and must act responsibly."
The statement noted that "in the first paragraph of the meeting, the Minister of Parliament Affairs of the Region, Fala Farid, and the Secretary of the Council of Ministers, Amanj Rahim, presented a draft of the Council of Ministers' decision to unify the procedures related to the financial and accounting system between the regional government and the federal government, taking into consideration the specificities of the authorities and constitutional rights of the region."
The statement explained that "after the dialogues and exchange of views, the Council of Ministers unanimously decided to approve the draft as is in order to unify the procedures related to the financial and accounting systems between the regional government and the federal government, taking into consideration the constitutional specificities of the region and its powers stipulated in the Iraqi constitution."
He pointed out that "it is clear that after 2014, the region's share of the budget was cut, and there was a complete disconnect with the federal government, which led to the adoption of two different financial and accounting systems by the finance ministries of the two governments. Therefore, in the current new phase between the two governments, it is an important step and will play a role in reorganizing the financial and accounting relations between them and resolving most of the observations of the joint team for financial oversight on revenues and expenditures and the staff of the regional government and unifying financial entitlements and salaries of employees throughout Iraq. This is in the interest of the region's employees and has begun with unifying the salaries of retirees."
The statement noted that "in the second paragraph, the Secretary of the Council of Ministers presented the results of the joint meeting between the technical delegation of the Ministry of Finance and Economy in the region and the Federal Ministry of Finance at the end of last week in Baghdad, as well as the results of the latest work of the joint team between the Financial Supervision Bureaus in the region and Baghdad. It was a summary of the recommendations, technical observations and serious steps taken by the ministries and institutions of the region that had previously taken the necessary measures regarding the recommendations and observations of the joint audit and review of revenues and expenditures and the delay in payment of salaries, in addition to the financial amount spent by the Federal Ministry of Finance on salaries for the months of July and August."
The statement added that "the Council of Ministers has instructed the ministries to continue coordination with the federal government and the joint financial oversight team from both sides, complete biometric registration, issue job numbers for all employees on salaries, and expedite the activation of the electronic payment system," stressing that "in return, the federal Ministry of Finance must send the salaries for July and August 2024 as soon as possible so that the Kurdistan Regional Government can pay the salaries for August as soon as possible, in a manner equivalent to employees who receive salaries in other parts of Iraq, if the region's employees are now entitled to the August salary."
The Council of Ministers also discussed preparations for the special meeting of the Federal Ministerial Economic Council, which is scheduled to be held in Erbil these days, on the pending issues between the two ministries. The Council of Ministers warmly welcomed the meeting held in Erbil, while the Kurdistan Regional Government considers this meeting an important opportunity to meet the relevant ministers in both the Kurdistan Regional Government and the Federal Government closely to discuss the pending issues between the two sides seriously in all fields and sectors.
The statement pointed out that "the Council of Ministers has assigned the Secretary of the Council of Ministers, the Head of the Coordination and Monitoring Office, and relevant authorities to make the necessary preparations in coordination with the Kurdistan Regional Government's representation in Baghdad and the Secretariat of the Federal Economic Council, and to direct the ministers to prepare their issues according to their characteristics and submit balanced proposals and recommendations that take into account the powers stipulated in the Iraqi Constitution in order to solve the issues radically and provide greater space for cooperation between the two governments and improve the living conditions of citizens throughout Iraq, including the Kurdistan Region." LINK
Parliamentary Moves to "Withdraw the Hand" of the Central Bank Governor
Recent developments in the political landscape have led to significant discussions regarding the role and responsibilities of the Central Bank Governor. As of September 6, 2024, there have been parliamentary moves to challenge the position of the Governor. This move is primarily driven by concerns over the Governor's performance and policies, leading to a debate on the legality and implications of such actions [2].
The Legal Implications of Nature-Related Risk for Central Banks
In a related context, legal experts are exploring the impact of nature-related risk on central banks and financial institutions. Frank Elderson, Member of the Executive Board of the ECB, has emphasized the importance of assessing and managing risks associated with nature degradation, which can significantly affect the economy and financial sectors [1].
Main Reason Behind the Move
The Parliamentary Finance Committee has confirmed the existence of a parliamentary move to withdraw the hand of the Governor of the Central Bank, citing the main reason as the Governor exceeding the legal age for the position [2].
Increasing Pressure on the Governor
Criticism directed at the Governor has been increasing, with economic experts questioning his financial policies and management of foreign exchange and reserves. The Governor, Ali Al-Alaq, is facing pressure regarding his handling of the dollar price fluctuations, with many calling for his dismissal [2].
Spain's New Central Bank Governor
In contrast, Spain is set to name Jose Luis Escriva, the current minister for digital affairs, as the new Bank of Spain governor. This appointment follows a vacancy that has lasted almost three months, with Escriva's experience at the ECB expected to give him an edge in the role [3].
Poland's Central Bank Independence
Meanwhile, in Poland, the top court has ruled that the central bank head cannot be questioned in parliament, leading to a clash between the government and judges. The decision was made to protect central bank independence, with the government arguing for reforms to the Constitutional Tribunal [4].
Turkish-Saudi Central Bank Cooperation
In a positive development for central banking cooperation, the central banks of Türkiye and Saudi Arabia have signed a Memorandum of Understanding (MoU) to enhance collaboration. The agreement aims to foster cooperation and corporate technical activities in the field of central banking [6].
Concluding Thoughts
The recent moves to challenge the position of the Central Bank Governor highlight the complex relationship between politics and central banking. As central banks navigate legal implications, personnel changes, and international cooperation, their roles in managing economic stability and financial risks remain crucial.
Parliamentary moves to "withdraw the hand" of the Central Bank Governor
9/5/2024
The Parliamentary Finance Committee confirmed, today, Thursday, the existence of a parliamentary move to withdraw the hand of the Governor of the Central Bank, while specifying the main reason behind that.
Finance Committee member Mohammed Nouri told Sumaria News, "We submitted a set of oral and parliamentary questions regarding the withdrawal of the Central Bank Governor Ali Mohsen Al-Alaq for exceeding the legal age."
Nouri pointed out that "so far, things have not gone as we wish, and in the coming days we may go to the Federal Court to challenge the legality of the age of the Central Bank Governor and request his direct dismissal through the legal age."
At the beginning of last year, Al-Sudani reappointed Al-Alaq as head of the Central Bank, nearly two years after he was dismissed from his post, amid questions about the feasibility of reappointing him, as he had caused several financial failures over the previous six years (between 2014 and 2020) of his management of the financial institution, according to his critics.
There is much criticism directed at the performance of the Governor of the Central Bank of Iraq, Ali Al-Alaq, who is facing increasing pressure regarding his financial policies and his management of foreign exchange and reserves, in addition to his failure to control the file of dollar price fluctuations, according to economic experts. LINK
Reviewing Tax Laws and Enhancing Collection Systems: Economic Priorities in September 2024
Economic discussions in September 2024 have increasingly centered around the need for a thorough review of existing tax laws and the development of more efficient tax collection systems. These calls come from various sectors, influenced by the changing economic landscape and the desire for more streamlined governmental operations.
The Case for Tax Law Review
Addressing Immediate Concerns
The urgency to review tax laws stems from the need to address immediate concerns such as the expiration of certain tax provisions. With many provisions from the Tax Cuts and Jobs Act of 2017 (TCJA) set to expire, there is a push for their extension, particularly those benefiting businesses and individuals, such as R&D amortization and accelerated bonus depreciation.
Preparing for Future Challenges
Reviewing tax laws is also seen as a strategic move to prepare for future challenges. The anticipation of expiring tax provisions, the impact of the Moore tax case, and the implementation of the global minimum-tax regime are among the issues that require careful consideration.
Ensuring that the tax system remains adaptable and responsive to economic changes is crucial for long-term stability.
Enhancing Tax Collection Systems
The Role of Government Efficiency
The call for enhanced tax collection systems is closely tied to discussions about government efficiency. Proposals include the creation of a government efficiency commission to audit the federal government and recommend reforms. The commission would aim to identify areas of waste, fraud, and abuse, thereby saving money for the federal government.
Addressing Budgetary Pressures
The need to enhance tax collection systems is further driven by budgetary pressures. As the government faces challenges in managing its finances, improving the effectiveness of tax collection can help mitigate budget deficits. This includes ensuring that all due taxes are collected and that the tax system is fair and equitable for all taxpayers.
Conclusion
The economic calls to review tax laws and develop more efficient tax collection systems in September 2024 reflect a broader goal of ensuring fiscal health and economic resilience. By addressing immediate concerns, preparing for future challenges, and enhancing government efficiency, these measures aim to create a more robust and responsive tax system that benefits both the government and the taxpayers.
The financial advisor to the Prime Minister, Dr. Mazhar Muhammad Salih, revealed the existence of a grey market that accounts for nearly 70% of the market or private sector activity, indicating that this percentage evades paying legal taxes.
Saleh said in an interview with "Al-Sabah", followed by "Al-Eqtisad News", that "taxes constitute in total in developed countries about (25) percent of the gross domestic product, while in Iraq they do not exceed (4) percent due to tax evasion, as the gray market, which is not known to the tax authorities, constitutes a percentage close to (70) percent of the market or private sector activity, while negative taxes, which are aid from cash income paid to the poor class, constitute (5) percent of the annual gross domestic product, and this constitutes the tax defect that compensates for the difference between the type of tax with the revenues of oil rents."
LINK
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For this reason.. Economic calls to review tax laws and develop the collection system 9/5/2024
Baghdad
With the increase in the size of state expenditures in the general budget, there has been talk for years about maximizing non-oil revenues, reforming the tax system in Iraq, and raising the value of taxes on the wealthy, which actually requires addressing the current laws related to taxes, controlling import operations, and preventing the smuggling of goods through border crossings.
In this regard, economic and financial expert Safwan Qusay revealed the formation of a committee by the Prime Minister’s Office to review tax laws, especially the Income Tax Law issued in 1982, noting that the law needs to be reviewed to amend some allowances in line with current income rates and develop the tax collection system to reduce tax evasion.
He pointed out that "the proposed tax increase aims to stop manipulation of invoices related to import operations and reduce tax evasion."
Qusay also confirmed that “the committee is studying introducing amendments to property and real estate taxes, especially with regard to the transfer of property between individuals.” LINK
Reports indicate that payments related to the Iraq Dinar are rolling out, generating excitement about potential currency revaluation. Stay grounded and informed!
Highlights
🚩 Payments are reportedly starting for Dinar holders.
💡 Legislative discussions are underway for amending Iraq’s Investment Law.
📈 Iraq’s currency is now compliant with international standards.
🏦 Central Bank talks with the US Federal Reserve show positive results.
🧘♂️ Experts advise staying calm amid excitement over potential revaluation.
🗣️ Importance of individual research and due diligence emphasized.
Key Insights
📊 Payment Reports: Many sources claim payments are being rolled out, hinting at potential currency exchange opportunities soon. Verification remains essential.
🏛️ Investment Law Amendments: Changes to the Investment Law are crucial for Iraq’s economic progress, reflecting increased investment activities.
🌍 Compliance with Forex: Iraq’s currency is now compliant with international trading standards, paving the way for broader acceptance in global markets.
🔄 Central Bank Collaboration: Ongoing discussions with the US Federal Reserve may enhance Iraq’s banking stability and international relations.
⚖️ Caution in Excitement: While news is promising, experts recommend maintaining a grounded approach until more concrete evidence is available.
🌐 Importance of Research: Viewers are reminded to conduct personal research and seek professional advice before making financial decisions.
As of September 6, 2024, the Iraqi Parliament has been actively involved in the management and regulation of the country’s oil and gas sector, focusing on drafting and amending laws to govern the industry effectively.
Key Laws in Focus
1. Kurdistan Oil and Gas Law No. 22/2007 (KOGL)
The Kurdistan Oil and Gas Law No. 22/2007 (KOGL) has been a cornerstone of the Kurdistan Regional Government’s (KRG) approach to managing oil and gas resources. Established after the adoption of the current Iraqi Constitution in 2006, the law aimed to empower the KRG to develop and utilize the substantial oil and gas reserves within its semi-autonomous region. Following the law’s enactment, the KRG signed over 50 production-sharing contracts (PSCs) with international oil companies (IOCs), marking a significant shift in the region’s participation in the oil sector.
2. Law of Identifying and Obtaining Financial Dues to the Kurdistan Region of Iraq from Federal Revenue (Law No. 5 of 2013)
This law establishes the legal framework for addressing outstanding revenue issues between the KRG and the federal government of Iraq, setting out mechanisms for defining and obtaining financial dues owed to the Kurdistan Region since 2004. It authorizes the KRG to sell oil produced in the region to recover unpaid revenues and includes provisions for the KRG’s share of sovereign expenditure revenues and compensation for damages inflicted by the former regime.
3. Proposed Amendments to the Kurdistan Region Oil and Gas Law
In June 2022, the Kurdistan Parliament made its first amendments to the Oil and Gas Law of the Kurdistan Region - Iraq, adjusting Article 4 regarding the Kurdistan Region Council on Oil and Gas Affairs. The amendments included adding a sixth member to the council and introducing a new paragraph concerning the council’s meetings and voting system.
4. New Oil and Gas Bill
Talks between the KRG and the Iraqi government in August 2023 aimed to draft a new oil and gas bill to resolve the dispute over the Kurdistan region’s constitutional rights on oil and revenue. The bill is intended to address the governance of oil and gas resources in both federal Iraq and the Kurdistan region.
5. Moratorium on New Oil and Gas Contracts
The Oil & Energy Committee of Iraq’s parliamentary body is seeking to halt the signing of any further oil and gas contracts until the passing of two key pieces of legislation. This move could impact the Oil Ministry’s plans and delay the country’s oil sector development.
Impact and Considerations
The ongoing legislative efforts in Iraq’s Parliament reflect the complex dynamics within the country’s oil and gas sector. These laws and proposed amendments are crucial for addressing revenue distribution, contract rights, and the role of international oil companies in the region. The inclusion of production-sharing contracts in the new oil and gas bill is particularly significant, as it could influence the future of the industry and the jobs it supports.