MELANIE HINDS CC NOTES HIGHLIGHTS, 9 SEPT

 Summary

Melanie Hines shares insights on the Iraqi Dinar, updates on the Forex market, and news from her contact in Iraq, emphasizing the importance of electronic payments to curb corruption.

Highlights

• 📈 Forex Market: The market opened at 506, indicating current trading rates.
• 📡 Unique Intel: Melanie’s contact confirms limited discussions on reforms, emphasizing official news only.
• 💳 Electronic Payments: Iraq is adopting digital systems to reduce corruption, a significant step for the economy.
• 🏢 Central Bank Update: A new skyscraper for the Central Bank symbolizes stability and progress in Iraq.
• 📅 Future Expectations: Discussions about potential revaluation timelines hint at significant economic changes ahead.
• 🔍 Market Readiness: The production of lower denomination notes is underway, preparing for a transition .
• 
  
• Key Insights

• 📊 Forex Rates Matter: Understanding the opening Forex rates is crucial for traders and investors, as they influence market sentiments and expectations.
• 🕵️‍♂️ Information Control: The military’s restriction on speculation highlights the importance of verified news over rumors in the investment community.
• 🌐 Digital Economy: Iraq’s shift to electronic payments is not just about modernization; it’s a strategic move to combat systemic corruption, paving the way for economic stability.
• 🏛️ Architectural Symbolism: The new Central Bank building represents Iraq’s commitment to economic growth and modernization, enhancing investor confidence.
• ⏳ Anticipated Changes: Insights on potential revaluation timelines suggest that investors should stay informed and be ready for shifts in the market.
• 📉 Denomination Adjustments: The transition to lower denomination notes indicates a planned adjustment in currency value, vital for those invested in the dinar.

September 2024: Tax Law Review & Collection System Overhaul

DINAR REVALUATION REPORT: Iraq's Tax System Development for Investors in 2024, 9 SEPT

Iraq's Tax System Development for Investors in 2024

In 2024, Iraq is in the process of developing a tax system that is attractive to investors. 1 The government is keen on enhancing fiscal space and opportunities for countercyclical policy, especially in the wake of the macroeconomic volatility caused by overdependence on oil revenues. 1 This move is part of a broader effort to diversify the economy and reduce the impact of oil price fluctuations on the country's budget and overall economic health.

Current Economic Situation and Challenges

Iraq's economy, heavily reliant on oil, has faced significant challenges in recent years. The unemployment rate, particularly among the displaced, returnees, women jobseekers, and those in the informal sector, has remained high. 1 The COVID-19 pandemic exacerbated existing economic issues, leading to a sharp contraction of 11.3% in real GDP in 2020. 1 However, there are signs of recovery as oil production increases and COVID-19 restrictions ease, allowing for a gradual restoration of domestic economic activity.  1

Tax System Reforms for Investors

Iraq's tax reforms aim to create a more stable and predictable investment climate. The government is working on improving oil receipts, which turned the overall fiscal balance to a surplus in 2021. 1 This surplus was partly due to budgetary gains from higher oil prices and measures to mobilize non-oil domestic revenues, primarily from customs. 1 These efforts are crucial for attracting foreign direct investment (FDI) and stimulating the private sector, both of which have remained weak. 5

Investment Law and Policies

Iraq has put in place an investment law (Investment Law No. 13 of 2006) that offers various incentives and protections for investors. 4 This law defines the roles and responsibilities of the National Commission for Investment and other regional and governorate commissions in granting investment licenses and overseeing investment projects. 4 The law also outlines the rights and obligations of foreign investors, aiming to provide them with a clear legal framework. 4

Doing Business in Iraq

The World Bank's Doing Business report highlights the procedures involved in starting and operating a business in Iraq. 2 While there are challenges, such as the time taken to complete certain procedures, the report provides insights into the business environment and the steps the government is taking to improve it. 2

Conclusion

Iraq's efforts to develop a tax system that is more welcoming to investors are part of a comprehensive strategy to diversify the economy and reduce dependence on oil revenues. By improving fiscal space, enhancing domestic revenues, and creating a more stable investment climate, Iraq aims to attract more foreign investment and stimulate growth in the non-oil sectors. The government's focus on legal frameworks and investment laws, along with improvements in the ease of doing business, are key steps in this direction.

 

Government Advisor: We are working on developing a tax system that is attractive to investors, 9 SEPT

  Government Advisor: We are working on developing a tax system that is attractive to investors

The head of the Supreme Committee for Tax Reform, the Prime Minister’s Advisor for Economic Affairs, Abdul Hussein Al-Anbaki, announced today, Sunday, a three-pronged plan for tax reform. While he indicated that facilitating measures would be taken regarding the tax administration, he confirmed that previous fines would be exempted for many groups to restore the confidence of taxpayers in paying taxes.

Al-Anbaky said in an interview with the Iraqi News Agency, which was followed by "Al-Eqtisad News", that "some media outlets interpreted the tax reform as aiming to increase non-oil revenues, and this interpretation is not scientifically sound," indicating that "the main goal of the tax reform is to create an easy and transparent tax system that is friendly to the business environment and attractive to investors, because the tax rate is not the basis, but rather the tax rate when multiplied by the tax base is the result of the tax revenue."

He continued: "We seek in tax reform to have a large tax base," explaining that "when the tax base is large, tax revenue will inevitably increase, even if tax rates are the same and at lower rates."

He added that "tax revenue is a by-product of the tax reform situation and not the basis for which the tax reform is launched," noting that "the Supreme Committee for Tax Reform wants to achieve tax justice and make tax accounting easy and transparent and does not want there to be cases of extortion, obstruction and delay of tax procedures."

He pointed out that "many facilities have been made, which ultimately lead to restoring the confidence of taxpayers in paying taxes in the tax administration," indicating that "many categories have been exempted, the cases of allowances have been expanded, and they have been exempted from previous fines and accumulated interest in order to restore the confidence of taxpayers in the tax administration."

He said, "When taxpayers come to account, this will lead to an increase in tax revenues," stressing that "the aim of these measures is to create a tax system that is attractive to investors and not just to seek to increase tax revenues because increasing tax revenues is a foregone conclusion."  link

Q & A WITH MARKZ, 9 SEPT

 MarkZ   

[via PDK]  Question:  What is your gut feeling for RV Mark? 

 MarkZ:   …nobody knows the timing…but my gut feeling is between the 11th and 15th…just a guess…

 Question:  Are we going to banks or redemption centers?

  MarkZ:  They are the same things…The redeeming banks/redemption centers…are bank locations with trained staff and equipment to handle our exchanges...I was told 90% of Americans will have an exchange location within 50 miles of their house….  If you are in remote rural areas …you may have further to go…not sure about other countries.

Question:  Will they release the RV on weekends or week days? 

 MarkZ:  I am told its easier to release it on a weekend- Saturday night to Sunday morning …but anytime is fair game.

Iraq's Path to Recovery: Opportunities and Challenges

DINAR REVALUATION REPORT: Opportunities in Iraq: Overcoming Turmoil and Embracing Recovery, 9 SEPT

 Opportunities in Iraq: Overcoming Turmoil and Embracing Recovery

The American Atlantic Council Institute has announced an upcoming conference on Iraq, scheduled for October 15, 2024, in Washington. 1 This gathering aims to explore the opportunities and challenges in the evolving relationship between the United States and Iraq, as the latter continues to emerge from years of political and social turmoil. 1 The conference, titled "The Path to Recovery, Development, and Global Partnerships in Iraq," will be the third of its kind under the "Iraq Initiative". 1

Addressing Challenges and Embracing Opportunities

At the conference, a diverse group of senior experts, researchers, and policymakers from both the United States and Iraq will convene. 1 Among the attendees are current and former senior officials who will contribute to discussions on major challenges and opportunities facing Iraq as it transitions from instability. 1 This year, the focus will be on the advancement of the energy sector, efforts toward sustainable economic diversification by the Iraqi government, and the evolving course of US-Iraqi relations.  1

Interactive Panels and Engagement

The conference will feature dynamic discussion panels that will delve into how Iraq, the United States, and the international community can positively engage with Iraq as it navigates its unique social, political, economic, and security transformations. 1 Direct personal participation and engagement via video are expected, with translation into Kurdish and Arabic provided to ensure inclusivity. 1

The Iraqi Initiative: A Framework for Change

The "Iraq Initiative" program, under which the conference is being held, is designed to provide transatlantic and regional policymakers with unique insights and strategies for supporting Iraq's recovery and development. 4 The initiative recognizes the critical role of the Iraqi Police Agency in the country's transition from conflict to peace and stability. 3 It emphasizes the importance of transforming the police force into a trusted and effective service that upholds the rule of law and protects human rights.  3

Economic Recovery and Diversification

As Iraq moves toward recovery and development, the country's economic transformation is a focal point. 1 The Iraqi government's efforts toward sustainable economic diversification are crucial for the nation's long-term stability and prosperity. 1 The conference will discuss the progress made and the path forward in this critical area. 1

Transatlantic and Regional Policy Engagement

The "Iraq Initiative" aims to facilitate engagement between transatlantic and regional policymakers, offering a platform for the exchange of ideas and strategies to support Iraq's path to recovery and development. 4 By fostering dialogue and collaboration, the initiative seeks to contribute to a more peaceful and prosperous future for Iraq and the region. 4

Conclusion

The upcoming conference in Washington signifies a significant step in recognizing and addressing the opportunities and challenges facing Iraq. 1 As the country moves past years of turmoil, the gathering of experts and policymakers promises to be a pivotal moment in charting a path toward recovery, development, and enhanced global partnerships. 1