Iraq’s non-oil revenues have increased significantly under Prime Minister Mohammed Al-Sudani’s leadership, going from seven trillion Iraqi dinars to twenty-seven trillion dinars in just two years. This remarkable rise indicates a deliberate move in the direction of increasing the economy’s stability and diversification. The following specialized economic reforms and initiatives are responsible for this expansion:
Revenues from income and wealth taxes: As a result of the successful implementation of tax reforms and increased taxpayer compliance, income tax revenues increased by 118 percent. This significant increase indicates that the tax system has been effectively restructured and that financial oversight has been improved.
Income from commodity taxes: By 285%, commodity revenues increased significantly. Improved production methods, expanded export markets, and strategic investments in the commodities sector are to blame for this expansion.
Fees increased by twofold: The government’s collection of fees increased by 50%, indicating improved administrative process management and organizational efficiency. This expansion demonstrates the government’s capacity to boost sector-specific revenue generation.
Industrial and Agricultural Developments The Iraqi government has focused on strategic investments and sectoral advancements to support and sustain this revenue growth:
Industrial development: Key industrial sectors, such as the production of fertilizer, chemical manufacturing, and military equipment, have seen significant investment. In addition to increasing industrial capacity, these investments have also increased the sector’s contribution to GDP.
Agricultural advancement: 5 million acres of agricultural land have been increased to 7 million acres by the government. This expansion aims to increase local food production, improve food security, lessen reliance on agricultural imports, and, as a result, strengthen the economic contribution of the agricultural sector.
The federal budget reflects a strategic realignment to reduce the budget’s dependence on oil revenues from 95 percent to 80 percent of total revenues and emphasizes a focus on balanced economic development and sustainability. Policy objectives and strategic directions Important policies include:
Promoting regional businesses: Promoting the local pharmaceutical and iron and steel industries is currently being pursued. These initiatives aim to create a more self-reliant industrial base by lowering import dependence and increasing domestic production.
Increasing private sector growth: By supporting existing businesses and establishing new manufacturing facilities, the government is attempting to encourage private sector expansion. This strategy aims to boost economic activity, create jobs, and encourage creativity.
Prime Minister Mohammed al-Sudani’s administration has demonstrated a clear commitment to expanding Iraq’s economic base and establishing a stable fiscal future. The significant rise in revenues from sources other than oil demonstrates the success of these strategic initiatives and positions Iraq to foster economic growth and stability.
Center for Research and Strategic Studies’ North America Office and Economic Studies Unit
