Demanded raising the tax rate to 30%
The head of the International Monetary Fund to Iraq called the need to freeze recruitment until the development of the administration in Iraq, indicating that the high proportion of civil servants was a means to satisfy some and employ them without regard to efficiency.
At a meeting in Baghdad, representatives of the Iraqi private sector discussed with an IMF delegation the latter’s agreement to provide a loan to Iraq to pay back arrears to Iraqi contractors, processors and farmers by means of the government and ways to resolve the problem because of its importance to the stability of the economy.
The head of the Fund’s mission to Iraq, Christian Gosz, asked about the possibilities that increase the revenues of the state, including the activation of direct and indirect taxes, including those imposed on non-oil products.
He pointed out that customs duties «ranged between 5 and 10 percent, which is not the right way to collect customs revenues». He stressed the need to «change this method to reach 30 percent».
He said that «the fastest gains and revenues come from the organization of the unit of tax payers and these are generating large revenues as they are imposed on the segment of large traders».
He called for “freezing recruitment until the development of the administration, because the increase in the proportion of civil servants was a means to satisfy some and employ them without regard to efficiency will lead to a deficit in the next ten years.”
He stressed the «importance of limiting the support ration to the poor», while describing the «business environment in Iraq «as more complex than other countries is slowed by the loss of security and insufficient electricity and non-collection of dues».
“The weakness of the banking sector and the importance of strengthening the business through the restructuring of the government” Rafidain “and” Rashid “, opening a large space for private banks with the need to assess the weaknesses and the establishment of the right foundations to combat money laundering, can be recourse to the Integrity Commission and specialized organizations such as International Finance Corporation.
“We have started to collect the customs tariff, which doubled its resources in some customs outlets to more than 30 times, while the electricity charge increased by 20 times. The Ministry of Electricity also referred to the points that contribute to improving the economy. To collect the wages of electric power on companies under investment contracts, began to show positive results”.
The head of the Iraqi Contractors Union Ali Sanafi, in an interview quoted by «life» international, «the release of arrears of transactions audited by the Office of Financial Supervision».
He pointed out that the Contractors Union «includes 34 thousand contractors, a large part of their suffering occurs at the stage of tax accounting, because the amounts of tax deduction reserved by the provinces, and demanding the tax departments to achieve tax accounting».
Economic researcher Lubna al-Shammari stressed the importance of “accelerating the implementation of reforms to their obvious impact on the economy and supporting the opportunities to strengthen the infrastructure.”
“Reforming the banking sector is a gateway to diversifying into Iraq,” she said.