The Mystery of Kurdistan's Border Taxes

Salih says his Committee has asked for clarification on the border revenues and that some explanations have been forthcoming. However, he adds, the Minister of Finance has also excused himself because, as he says, “he just started following this issue up and he will tell us more when he gets some proper results.”

Up until last year Iraqi Kurdistan's Ministry of Finance was under the control of one or other of the region's two most powerful parties, the Patriotic Union of Kurdistan, or PUK, and the Kurdistan Democratic Party, or KDP. It is currently under the control of the Change movement.

And sources inside the Ministry of Finance in Iraqi Kurdistan say that there has been more attention paid to border revenues recently. As a result, there have also been some attempts to trace the money and look into the issues. Insiders say some customs officials jobs have been changed in an attempt to bring the revenues back to the public coffers.

“The [Iraqi Kurdish] government should be benefiting from this source of income in a positive way and it should reveal revenue sources to the public,” Salih argues. “All this money should come back to the public.”

The head of the region's Office of Financial Supervision says his colleagues have not chased up the border revenues either. Khalid Jawishly says this is because of the financial crisis in the region and because his office didn't want to put any further pressure on at such a hard time. Jawishly wouldn’t comment on rumours that the proceeds collected at the borders go to companies owned by the bigger political parties. He did say that there are plans to investigate this in the near future though.

Economist Alnad Mahawi has conducted some research into how the region  collects money at its borders and he says he can furnish several explanations.

The first problem, he says, is the lack of transparency. “About half of the revenues never reach the Ministry of Finance. They are taken by political parties,” he notes.

Secondly, the security crisis caused by the extremist group known as the Islamic State has seen a drop in commercial traffic since the middle of last year. This has caused a further decline in revenues taken at the regional border.