Restructuring taxes in Iraq promotes foreign investments 10/9/2015
Restructuring taxes in Iraq promotes foreign investments
Iraq continued to suffer complications in the tax regime. As a result of preoccupation with the state of war tax legislation it did not receive the required follow-up, either from the community or the state of financial institutions and laws that shape the tax administration. But recently the sector has witnessed a remarkable development, and has become Iraq is seen increasingly in the form of taxes as a vital source of sustainable revenues in light of falling oil prices. A report issued by «Deloitte», that Iraq «provides a large number of investment opportunities, especially in the sectors of energy and security (...) is still the Iraqi economy is heavily dependent on the oil sector, the non-oil sector growth and is an important long-term aim of achieving as much as greater economic stability and infrastructure.
In the current year, the Iraqi budget law contains a number of provisions aimed at expanding the tax revenue base through new taxes on sales and applied to consumer products such as tobacco and Internet services and others, in addition to the implementation of the tariff law. This tax also applied to personal income for workers in Iraq, by reducing legal and tax allowances slides and apply it to the Iraqi citizens and foreigners alike, leading to the creation of a broader scope of the tax system compared to many of the neighboring Middle East countries.
Commented in charge of international tax services and taxes mergers and acquisitions in the «Deloitte» Middle East partner, Alex Lu, saying: «Despite the fact that the Middle East countries have not paid in the previous tax regulations great interest, but the current landscape is changing», adding: «currently witnessing high rate of awareness of the importance of increasing tax revenue, which proceeded the tax authorities in Iraq to familiarize their counterparts in the region to benefit from their experiences, and proactively sought in the form to secure the necessary technical training in this field.
He said that non-compliance with tax laws in this area will have important implications. He believed that «the process of transfer of profits out of Iraq is one of the major challenges facing multinational corporations operating in the region, be it in the form of payments to suppliers from Iraq to the outside, or even the distribution of profits to shareholders.
The «central bank» Iraqi passed laws in the context of an emphasis on the imposition of some existing procedures, such as ensuring the institutions for a tax exemption as a precondition for the transfer of funds abroad.
The report, titled «Doing Business Guide - the tax situation in Iraq», that the federal budget law for the current year is based on the goals and certain assumptions ambitious, likely to be the process of achieving revenue through tax collection a basic need in the coming period, due to the expected continued decline in the prices oil during this year and 2016, in addition to increasing spending on the sectors of defense and rehabilitation.
According to the report, constitute a large area needs for infrastructure projects and development opportunities for large companies, which are working to re-examine the future prospects for their investments.
The official partner in «Deloitte - Iraq», Iyad Mirza: «Despite the security situation, which constitutes a factor of concern for investors in Iraq, we are witnessing a growing interest from small and medium enterprises, which face challenges in terms of requirements imposed by the governing bodies», saying that «time come for foreign companies to take the necessary steps to mitigate the risks of challenges to be faced later. \