LEARN ABOUT THE IRAQI GOVERNMENT’S OBJECTIVES IN IMPLEMENTING THE ASYCUDA CUSTOMS SYSTEM
The Center for Strategic Research and Studies affirmed on Saturday that the implementation of the ASYCUDA system and the recent package of customs procedures is not primarily aimed at compensating for the decline in oil revenues, but rather falls within the framework of regulating international trade and protecting the national economy.
The center stated in an analytical study followed by Al-Sa’a Network that “the simultaneous launch of the ASYCUDA system, the pre-calculation of customs tariffs, the collection of tax deposits, and the activation of quality control, with the decline in public revenues, led to a mistaken belief that the main objective of these measures is to increase non-oil revenues,” indicating that “this perception does not reflect the essence of customs policies.”
He explained that “an effective customs policy is based on 4 main pillars: protecting the national product, improving the trade balance, and directing the consumption pattern in line with the state’s economic goals, while increasing non-oil revenues comes as a secondary result, not as an end in itself.”
He pointed out that “customs tariff revenues, even in the best of circumstances, will not exceed 8 to 10 trillion dinars annually, an amount that only covers one month’s expenses of the general budget,” noting that “a decrease in the price of a barrel of oil by $5 is enough to completely eliminate these revenues.”
(I was amazed at this statement as we have been told many times through other articles the funds collected could rival the oil revenues if they were collected and managed correctly. Is this article talking about just the funds from current imports today or from a standpoint of Iraq being a brokerage house with massive imports and exports through the port of Faw and the Development Road?)
The center explained that “the real goal of these measures is to regulate imports and redirect consumption patterns towards alternative economic activities that contribute to stimulating non-oil sectors and increasing GDP,” noting that “the current implementation mechanism has led to an economic shock affecting citizens, merchants, and private sector employees, and has threatened job stability as a result of potential workforce reductions.”
The study criticized “implementing all the measures at once,” arguing that “a gradual approach would have mitigated the shock by starting with the most valuable and impactful goods, and postponing some systems such as tax trusts and quality control to later stages.”
(Iraq did do a multi-prong approach. Anything they do would be a shock as customs and tariffs needed a lot of work to charge appropriately and safeguard the funds.)
The center called for “a comprehensive review of the customs tariff, particularly in the electrical and electronic equipment sector,” stressing “the need to form a specialized committee that sets a clear and declared vision for customs policy, and determines tariff rates for each product and each country of origin, taking into account the reality of the trade balance.”
The center concluded by warning that “the rigidity of the customs tariff policy and its inability to be adjusted according to market variables and economic indicators will lead to its failure to achieve its objectives.”
(I am sure the IMF and the WTO are on top of this effort with ASYCUDA and are helping Iraq in its implementation.)
