Kurdistan challenges Baghdad on salary delays and unequal revenue policies
Shafaq News/ The KurdistanRegion’s Ministry of Finance and Economy has criticizedthe Federal Finance Ministry forfailing to adhere to Federal Court rulings on salary disbursements for theRegion’s public sector employees.
In a detailed statement onTuesday, the Kurdish Ministry denied allegations offailing to submit non-oil revenues for 2024 and highlighted discrepancies infederal practices.
According to the KurdishMinistry, “the Federal Finance Ministry transferred 10.03 trillion IQD(approximately $6.9 billion) into the Kurdistan Regional Government's (KRG)account at the Central Bank of Iraq, Erbil Branch.”
“However, this figure excluded726 billion IQD (approximately $500 million) for pension contributions andincome taxes,” the Ministry said, adding, “fallingshort of the 11.57 trillion IQD (approximately $7.9 billion) allocated underthe 2024 Federal Budget by 822 billion IQD (approximately $570 million)”.
The Ministry also criticized the fragmentednature of salary disbursements, noting that funds were transferred in up toeight tranches per month, with significant delays sometimes stretching intosubsequent months. “These delays,” the Ministry stated, “resulted in salaryinterruptions for some departments lasting up to five months, in violation ofFederal Court rulings and constitutional provisions.”
The Ministry reported that by November2024, it had submitted 4.35 trillion IQD (approximately $3 billion) in non-oilrevenues, as outlined in its November trial balance shared with the FederalFinance Ministry.
An additional 399 billion IQD(approximately $275 million) was transferred to the Federal Ministry’s accountin accordance with Article 29 of Financial Management Law No. 6 (2019) and abilateral agreement requiring the Ministry to deposit 50% of non-oil federalrevenues starting May 2024.
“The remaining revenues were allocated tooperational expenses, investment projects, and addressing salary deficitscaused by what it described as restrictive federal policies,” the Ministryclarified, pointing to the Federal Government’s decision to “halt allowancesand promotions” for KRG employees while “continuing these payments” for federalemployees.
Evidence cited by the KurdishMinistry, including federal ministerial orders from August and September 2024,showed that allowances and promotions were ongoing in federal institutions. TheMinistry argued that this demonstrated a clear policy of “double standards.”
In December 2024, the Ministryrequested 677 billion IQD (approximately $465 million) to “cover salaries” for820,268 individuals, including employees, retirees, and social welfarebeneficiaries. “However, the Federal Finance Ministry allocated only 264billion IQD (approximately $180 million), with no funds provided for retirees’pensions,” the Ministry noted.
“This was despite an approvedtransfer of 430 billion IQD (approximately $295 million) for pensions.”
The Ministry questioned the equity ofthese decisions, asking, “Is it fair to deprive retirees of their entitlements?Can it be justified to allocate only one-third of the requested amount for thesame number of beneficiaries?”
The Ministry highlighted its efforts to “digitizesalary payments” through the "Hesabi" (My Account) project, aninitiative supported by a Federal Supreme Court directive, noting that “thesystem allows salary payments via banks licensed by the Central Bank of Iraq.”
“To date, 750,000 employees have beenregistered, with 220,000 already receiving their salaries through this platform,”the Ministry added.
The Ministry concluded its statement byinviting “any fact-finding committee, whether international or Iraqi,” toinvestigate the matter and reaffirmed its openness to scrutiny. It alsoreferenced “prior cooperation” with both federal and regional audit bureaus todemonstrate its commitment to transparency.
The statement ended with a pointedquestion that encapsulated the Region’s grievances: “Are we Iraqi citizens?”
