Crisis management expert Ali Jabbar Al-Fariji has outlined several ways the Iraqi government could increase revenue and reduce its budget deficit without putting more financial pressure on citizens by raising the dollar exchange rate.
Al-Fariji told dinaropinions.com that increasing the dollar rate from around 1,300 to 1,500 dinars would give the government more dinars from its oil revenues. Estimates in the draft 2027 budget suggest the change could add around 19.2 trillion dinars to reported oil revenue.
However, he explained that this would not represent entirely new economic income. Instead, it would mainly reflect the higher dinar value of oil dollars, while citizens and businesses could face higher costs for imported goods, services and production materials.
Al-Fariji said the government could generate real revenue by reforming the customs system. This would include automating procedures at border crossings, introducing digital monitoring and connecting customs records with tax and banking systems. These steps could help prevent false invoices, reduce revenue losses and improve customs collection.
He also recommended expanding the tax base by introducing a digital system that calculates taxes based on business activity, sales and profits. This could help the government collect unpaid taxes, tackle tax evasion and bring more informal businesses into the system without placing additional pressure on people with limited incomes.
Another option is to make better use of state-owned assets. Al-Fariji said the government should review the financial performance of public companies, ports, airports, telecommunications services and government-owned properties.
He argued that these assets should generate income for the state rather than become a financial burden. Clear performance targets and regular reviews of their returns could help improve revenue.
He also called for a review of government contracts, subsidies, salaries and operating expenses that provide limited returns. Reducing wasteful spending could improve the budget position without introducing new taxes or weakening citizens’ purchasing power.
Al-Fariji further highlighted the importance of digital payments and a connected information system linking sales, imports, taxes and banks. Such a system could help identify unreported transactions, reduce financial losses and improve the collection of government revenue.
He said Iraq could also increase the real value of its oil income by improving production and marketing efficiency, reducing unnecessary costs and discounts, and developing refining, petrochemical and gas industries.
According to Al-Fariji, improving the actual value generated from oil and strengthening non-oil revenue sources would offer alternatives to relying on a higher dollar exchange rate to increase the dinar value of government income.
