Iraqi PM emphasises Private Sector Support for Economic Reform

By John Lee.

Prime Minister Mohammed Shia' Al-Sudani presided over the Tax Conference for Economic Development and Investment Promotion in Baghdad, stressing that supporting the private sector is central to Iraq's economic reform agenda.

He highlighted the government's commitment to providing an attractive environment for investors, implementing global business and taxation standards, and ensuring flexibility and fairness in fiscal policies.

The conference, organised by Osoul Foundation for Economic Development and Sustainability, focused on the 2025 tax reform plan, digital and regulatory solutions, and enhancing public-private partnerships in tax collection.

Key points from the Prime Minister's address included:

• Priority on economic reform and transition to a diversified economy.
• Annual public spending around 150 trillion IQD [≈100 billion USD] with tax revenues of 3 trillion IQD [≈2 billion USD], requiring review.
• Past economic reforms were often used for rhetoric and pressure on official institutions.
• Previous 2023 Tax System Reform Conference produced important recommendations.
• Council of Ministers Decision 24074 (2024) implemented tax reform packages, followed by the formation of the Supreme Committee to monitor tax reform.
• International investors have shown growing interest in Iraq's tax reforms.
• Non-oil revenue increased from 7% in 2022 to 14% in 2024.
• Tax revenues rose 26% in 2024 compared to 2023, with a 3% increase in the first half of 2025 versus the same period last year.
• Digital transformation improved tax accuracy and efficiency, including electronic verification of payment receipts and a tax inquiry platform reducing delays and fraud.
• Engagement with reputable international firms to align Iraq's tax system with global standards.
• New draft income tax law incorporates international standards while maintaining social fairness and supporting lower-income earners, green economy projects, and startups.
• Tax policy reforms also targeted oil companies and harmonised procedures between the federal government and Kurdistan Regional Government for universities and local banks.
• Reforms send a message to citizens on optimising resource management and supporting the political system.

(Source: Office of the Prime Minister)