Iraqi government under fire for raising fuel prices and taxing celebrities
In a bold fiscal reform effort, the Iraqi government has recently implemented significant changes, including raising prices on two crucial types of automotive fuel and expanding taxation to cover certain businesses and public figures. Nevertheless, these moves have stirred up considerable backlash among Iraqis, underscoring a deepening dissatisfaction with current economic policies.
Iraqi Prime Minister Mohammed Shia al-Sudani led a cabinet meeting on Tuesday where it was announced that prices for premium gasoline will see a rise of around 30%, while super quality fuel will increase by 25%. The adjustments are set to be implemented by early May.
Get ready to pay more at the pump starting May 1st as the council has decided to raise the price of premium gasoline from 650 to 850 dinars per litre, and super gasoline from 1000 to 1250 dinars per litre. Although government sources have stated that there are no immediate plans to increase prices on regular and poor-quality gasoline, many Iraqis remain skeptical about the possibility of future hikes.
The announcement ignited a storm of reactions on social media, with platforms like X (formerly Twitter) witnessing a surge in calls to oppose the decision. While some welcomed the move, arguing it primarily affects affluent individuals who use premium fuel for luxury vehicles, others voiced vehement opposition, citing the broader impact on the populace.
Speculations abound regarding the motives behind the price hike, with some Iraqi economists suggesting pressure from international entities like the World Bank. However, official statements from such institutions regarding the matter are yet to surface.
In a groundbreaking development, the General Tax Authority in Iraq disclosed plans to extend tax collection to 85 new entities, previously exempt from such obligations. The list includes taxi companies, advertising firms, celebrities, hotels, and restaurants.
According to Ali Wael Alawi, the head of the General Tax Authority, taxes will be imposed on sectors like airport taxis, Careem taxis, and car rental companies, which were previously untouched by taxation. The cabinet has greenlit a 15% tax on these entities, marking a significant shift in fiscal policy.
While objections arose from certain quarters, several economic experts highlighted the potential benefits of taxing these categories. They anticipate enhanced state revenue, strengthened oversight mechanisms, and improved collaboration among Iraqi institutions beyond the tax authority.
Dargham Mohammed Ali, an economic expert, told Al-Araby Al-Jadeed, The New Arab’s Arabic sister language, about the need for coordination and licensing mechanisms to effectively regulate tax collection from these sectors.
He underscored the significance of these revenues as supplementary income for the state budget, diversifying income sources beyond oil-dependent sectors.
As Iraq navigates these fiscal adjustments, the repercussions of these decisions on the economy and public sentiment remain the subject of intense scrutiny and debate.
This report provides a comprehensive overview of Iraq’s recent fiscal manoeuvres, shedding light on the implications for citizens and the broader economic landscape.
