By John Lee.

Companies are reportedly relocating from the Kurdistan Region to rest of Iraq in an effort to avoid taxes and customs duties which the Iraqi government charges on goods exported to southern Iraq.

According to Kurdish media network Rudaw, the Baghdad government considers goods produced in Iraqi Kurdistan to be foreign, and subject to import duties.

Mustafah Zubeir, of the KRG Ministry of Industry and Trade’s Directorate General of Industrial Development, is quoted as saying that about 100 factories have left Kurdistan for Baghdad to avoid this issue.

More here.

(Source: Rudaw)

By Fehim Tastekin for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News.

While Turkey was eagerly anticipating a new government in Baghdad to sort out many problems with Iraq, a last minute decision by the outgoing prime minister has added a fresh item to the list of ongoing disagreements between the two countries.

Haider al-Abadi unexpectedly signed a decree to set up three new checkpoints in government-controlled areas in northern Iraq that will effectively slash Turkey’s trade with it.

The trucks that enter the country normally pass through the sole border crossing that is controlled by the Kurdistan Regional Government (KRG) and will now also have to pass at least one of these additional checkpoints.

Click here to read the full story.

By John Lee.

Iraq and the Kurdistan Regional Government (KRG) will reportedly soon unify customs duties to streamline the system and prevent the double taxation of the Kurdistan Region’s businessmen.

According to Rudaw, Erbil and Baghdad have two different customs fees, causing disputes between the two aresa.

They previously reached a preliminary agreement on unifying the customs fee, but could not agree on who would receive the revenues.

More here.

(Source: Rudaw)

This article was originally published by Niqash. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

An Evil Plot? Iraq’s Most Industry-Savvy Province Refuses to Impose Baghdad’s New Customs Tax

A new customs tax came into effect in August. But in Basra, one of Iraq’s busiest provinces for imports, officials refuse to impose Baghdad’s tax, saying its unfair use is damaging business there.

There are over a thousand cars parked in a Kuwaiti port on the Iraqi-Kuwait border. There are another thousand or more parked in the Umm Qasr port on the Iraqi side of the border.

And apparently they are all sitting there because the importers and exporters refuse to pay the newly-imposed Iraqi customs duty, that has come into effect as part of Prime Minister Haider al-Abadi’s package of financial and administrative reforms.

“We have suffered serious financial damages because of the delay in shipping our products from Kuwait,” local businessman, Saleh al-Sharifi, complained to NIQASH. “And we are paying for the costs of these delays.”

Local importers see the duty as unfair. “The new customs tax has only been applied in Basra – specifically in the ports of Umm Qasr and Safwan,” al-Sharifi says.

“Meanwhile it doesn’t seem to be being applied in the north in Iraqi Kurdistan. It feels as though there are double standards here. Or maybe the Ministry of Finance only actually has power over the ports of Basra?”

In fact the Iraqi government has already said in the past that it doesn’t have control over border crossings in Iraqi Kurdistan.

“We had to ask the officials at the Kuwaiti port to stop allowing imported cars in because we don’t have enough space for them in our parking lots,” says a senior official in Safwan, noting that all their car parks are full.

By John Lee.

New taxes in force since the beginning of last week mean that Turkish producers exporting into Iraq now need to pay US$290 per ton of exported chicken meat, rather than $35 previously.

As a result, the Turkish poultry sector, which has the fourth largest share in the world’s poultry market, risks losing its biggest market, Iraq.

The Poultry Site quotes the head of the Turkish poultry meat producers and breeders association, Sait Koca, as saying:

“Turkish producers exported around 227,000 tons of poultry to Iraq in 2014 for around $443 million. Unless the new custom taxes are revoked, we are likely to lose our biggest export market to Brazilian exporters.”

Turkish exporters use the Habur Border Gate to enter the Iraqi market; Koca said they can also use the Iranian border gates but the Iranian side demands $100 from each truck.

Ömer Görener, chairman of Turkish poultry producer Banvit, told Hurryiat Daily News:

“Iraq asks for only $35 per ton at other border gates for poultry imports coming from Brazil or Iran. With the new taxes, our poultry’s price is $255 higher than others per ton, damaging our competitiveness.”

The Iraqi side has also begun implementing the same rise in taxes on egg imports from Turkey, which had been sending more than 250 trucks full of eggs to Iraq until recently, making over $410 million of contributions to exports to the Turkish economy annually. Around 90 per cent of Turkey”s egg exports are to Iraq.

(Source: The Poultry Site)

(Poultry image via Shutterstock)