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.
Profits from Protest: Street Vendors Flock To Baghdad For Demonstrators’ Business
The regular popular demonstrations being held in Baghdad every Friday are not just good for the country’s democracy, they’re proving an invaluable business opportunity for vendors of street food, water and coffee and trinkets.
Business is so good in fact, that Iraqis like Jawad Rabee have come all the way from Dhi Qar province to sell water bottles. Rabee says that back home he usually sells water at military checkpoints where people have to queue to get through. But he thought that the demonstrations in the capital would be a good opportunity to do better business.
He was right: On an ordinary day Rabee says he would have sold about 25 boxes of water bottles – so around 300 bottles. Now every Friday he goes to Tahrir Square in central Baghdad and sells around 1,500 bottles. With the profit he makes from one Friday, he can survive all week.
“I leave the hotel where I am now staying about three hours before the start of the demonstration,” Rabee explains his method. “I fill the cart with water boxes and I buy ice to keep them cool.”
Most of the vendors plying their trade at the demonstrations do not live in Baghdad. And they all have to work hard to make a living. Police close the streets around five hours before the demonstrations and many of the vendors with big carts enlist the aid of other sellers, who collect water bottles from them, then sell them all from smaller boxes before returning for more. They also store their goods in yards near Tahrir Square so they can return there for more stock.
In order to expand his men’s shoe business, Mohammed Jizani had to borrow $100,000 from a loan shark. As is common in such cases, he was forced to pay the lender $4,000 a month in interest until the final payment on his debt.
Jizani, who owns four shops in Baghdad, imports most of the goods he sells from Turkey. He tried to get a loan from local banks, but lacked sufficient collateral. Even the feasibility study he prepared to outline the profits he expected from his business proved useless.
“Dealing with the usurer is easy,” he said sarcastically, “while banks do not seem to be interested in small business expansion.”
Al-Monitor found out that the Iraqi moneylender Jizani dealt with owns a foreign exchange office in the Jamila area, east of Baghdad. He lends money to merchants like Jizani and has developed relationships with owners of small factories that produce foodstuffs as well as wholesale food stores.
Charging excessive interest, called “riba” in Arabic, is prohibited as a sin under Islamic law. But Jizani, a practicing Muslim, said a lack of liquidity can lead otherwise dedicated Muslims to make deals with predatory lenders.
Such was the case with Ahmed Jabbar of Baghdad. Extended unemployment led Jabbar to buy a taxicab with money from such a lender. But he said he believes the money he borrowed does not constitute an act of riba. He told Al-Monitor, “I took from one of the operators $10,000 and I will pay them back in Iraqi dinars with an interest amount equivalent to about $3,000.”
On the sideline of the UN General Assembly meetings, Iraqi foreign affairs minister Dr. Al-Jaafari met his Iranian counterpart, Mr. Mohammed Javad Zarif.
During the meeting, they discussed the bilateral relations and horizons to promote them in the interest of the two neighbouring countries; in addition to, discussing the political and security situations in the region and the world, the International community’s role in solving crises and assisting countries affected by terror, the impact of the Iranian nuclear agreement on the stability of the region and emphasizing the need to concrete diplomatic efforts to solve the Syrian crisis.
The minister asserted the need to adopt political solutions and ignore the military ones, provide assistance regarding various fields for countries affected by terrorism, adding:
“Terrorism threatens all states and excludes none, unless there are real and serious positions taken against terror; its circle shall be extended.
“Da’esh terrorists come from more than 100 states which means that we are distinctively engaged in a global war, and the whole world must mobilize to confront this threat regarding the political, military, media and humanitarian fields.”
While, the Iranian foreign minister asserted the match of visions in the need to adopt the political solutions and supporting countries stricken by terrorism, asserting the readiness of Iran to provide support and assistance to achieve security and stability.
(Source: Iraqi Ministry of Foreign Affairs)
By John Lee.
Iranian vehicle maker Iran Khodro (IKCO) has exported over 6,000 vehicles to the international markets in the first half of the current Persian calendar year surpassing the car manufacturer’s export record throughout last year.
IKCO ‘s Deputy for Export and International Department, Saeed Tafazzoli said IKCO’s main foreign site is located in Iraq (pictured) and is operating at full capacity. Other foreign sites are also operating “regularly” in Venezuela and Senegal.
He added that IKCO’s after-sales services have been expanded in target counties: “The largest after-sales services networks are in Iraq, Russia and Syria which have largely imported IKCO ‘s vehicles. Meanwhile, about 150 active dealers are offering IKCO ‘s services in the international markets.”
The publishers of Iraq Business News are delightd to announce the launch of our new publication, Iran Business News, in response to the intense business interest in Iran in anticipation of the lifting of santions.
After years of negotiations, agreement has been reached between Iran and the P5+1 countries (China, France, Russia, the United Kingdom, the United States, and Germany) that will allow the gradual lifting of sanctions, finally opening Iranian markets to international commerce.
This is expected to have a dramatic effect on Iranian economy and society.
With a population of 74 million, and the second largest economy in the Middle East and North Africa (MENA) region, a sanctions-free Iran holds vast potential for growth and development, and international companies are already signing contracts.
As with Iraq Business News, our mission at Iran Business News is to provide our readers with the highest quality information on the business and economy of Iran, keeping them up to date and enabling them to make the right decisions.
To promote your business to the Iranian market, please contact our sales manager, David Jeffries: Advertising@iran-bn.com, +44 20 8150 5293.
(Iran-Iraq image via Shutterstock)