The Federal Government placed 421 billion and 760 million dinars in the Kurdistan Region’s Ministry of Finance and Economy’s bank account on Tuesday in order to cover the civil servants’ June salary.
The Kurdistan Region traditionally had autonomous funding, which partially funded salaries, thanks to oil exports. However, this source of revenue for the regional administration has been stopped since March 2023 due to a dispute between the federal government and Turkiye, the oil export route.
A tentative deal was then negotiated between Baghdad and Iraqi Kurdistan for Kurdish oil sales to go via the federal administration. The autonomous area will get 12.6% of Iraq’s public spending in return.
A court decision mandated that the Kurdish government turn over “all its oil and non-oil revenues” to the federal government and submit to an audit of pertinent financial records.
Since oil earnings have halted, taxes from border crossings with neighboring countries—including Iran and Turkiye, two of Iraq’s largest trading partners—have become the main source of income for Kurdistan.
