Clarification of the Cabinet's decision regarding the withdrawal of tax deposits
A responsible source commented on Thursday (May 1, 2025) on what was circulated on social media and some media outlets regarding a government decision to withdraw tax deposits, stressing that the procedure is legal, announced, and aims to cover basic expenses, most notably salaries.
The source told Baghdad Today, "The sums referred to in the decision were not recorded in a final account within the public treasury, but were used to cover expenses, a practice followed by previous governments and implemented in accordance with a decision announced by the Council of Ministers."
He explained that "the decision included reversing the amounts of trusts from the revenues collected during tax accounting," noting that "the Ministry of Finance, as the competent authority, studied the decision before making it."
The source added, "What happened in the previous government regarding tax deposits could have been avoided if the current procedure had been adopted at the time," considering that "the deliberate distortion and fraud by some parties for electoral purposes not only targets the government, but harms all of Iraq. "
He concluded by stressing that "the government is proceeding with its reforms despite attempts to disrupt them, in a manner that ensures the best possible service to the Iraqi citizen."
Decision details: Temporary withdrawal and subsequent settlement.
The Cabinet voted last April to authorize the Minister of Finance to withdraw more than 3 trillion dinars from tax deposits less than five years old to cover salary expenses for the coming months. These amounts will be subsequently settled from monthly tax revenues.
According to observers, this measure is a temporary means of financing to overcome delays in transferring oil revenues from the US Federal Reserve into local currency, without the need for borrowing or delayed salaries.
Despite the technical
nature of the decision, the withdrawal of tax deposits sparked widespread political controversy, with some forces viewing it as a reflection of the fragility of the financial situation and the government's weak ability to manage expenditures without compromising temporary and legally allocated funds.
For its part, the Parliamentary Finance Committee believes that addressing this crisis requires a comprehensive review of fiscal policy, reducing reliance on oil, and enhancing non-rent resources, to avoid the repeated resort to exceptional solutions that could be legally considered controversial. link