But it’s only the first step. Further work is needed to ensure the effective redistribution of oil revenues between the federal government and the states, with a clear basis for that redistribution.
Equitable distribution of Iraq’s wealth will also require a reformation of the tax system and then a transparent and equitable redistribution of tax revenues between the different provinces, that is covered by new legislation.
More taxes should be going into the national budget, which would reduce the national dependence on oil revenues, the so-called “black gold”. To do this, tax collection methods must be improved and the tax base expanded by the introduction of new taxes, like a value added tax for example.
Provincial authorities should also be given the power to come up with their own special, regional tax laws so that they can supplement their budgets – although these should not be out of line with Iraq’s national fiscal policies.
All of these measures would ease the political, ethnic, sectarian and territorial conflicts in which Iraq is currently engaged. They would establish fair principles on an ongoing basis and promote competition between the various states. And in the end, they will best serve the interests of all parties in a nation characterized by ethnic and religious pluralism.
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