The Mystery of Kurdistan's Border Taxes

Iraqi Kurdish Finance Minster Hamalan made this statement following a visit to the border crossings into Iran. “The aim of my visit was to follow up on the collection and distribution of revenues at the border,” the Minister said. “There are companies belonging to political parties on the border and they're collecting money from the drivers for each load that crosses – but the money doesn't go into the region's Treasury.”

This statement was possibly one of the first real admissions that there's a problem.

Some of the most important border crossings in Iraqi Kurdistan are the Ibrahim al-Khalil border crossing in Zakho, Dohuk, on the Turkish border, the Bashmakh border crossing on the Iranian border near the city of Sulaymaniyah, Parvis Khan, southeast of Sulaymaniyah also on the border with Iran and Haj Omran, another crossing into Iran but closer to the Iraqi Kurdish capital, Erbil. There are also a number of informal border crossings.

Figures obtained by NIQASH from the region's Ministry of Finance indicate that, before the current financial crisis, income from the four major, aforementioned border crossings totalled almost four trillion Iraqi dinars (around US$860 million) over the past years. However Iraqi Kurdish opposition parties are critical, saying the real figures are far higher.

For example, at one stage the official formerly responsible for customs at the Ibrahim al-Khalil crossing said that, based on his experiences, daily revenues at the borders must be more than US$2 million a day. But again, critics say the daily intake should be more than that for 2013. The reply from politicians is that there's been a decline in the movement of both goods and people across the borders, hence the lower figures.

Former crusading-journalist-turned-politician Ali Hama Salih, who is now the vice-chairman of the Iraqi Kurdish Parliament's Finances Committee, says that he is certain that no figures have ever been given to the Committee about how much money comes in via border revenues.

“Not this year or in previous years,” says Salih, who is a member of the anti-corruption opposition party known as the Change movement, or Gorran. “Not only that,” he told NIQASH. “The Finance Ministry itself is not transparent enough. A big part of these revenues go to other people and other bodies, supported by political parties.” Salih declined to name any names though.