Deflation threatens the Iraqi economy as the government seeks to collect 11 trillion dinars





05/12/2016 (0:01 pm) - The number of readings: 59 - Issue (3795)


Baghdad / peace Zidane

A number of economists, that raising taxes and deductions from the salaries of state employees in the budget next year will affect the movement of the market and the country's economy will enter a phase of contraction. Iraqi state and impose income tax on employees in addition to the deduction of an amount of 4.8% of the total salary go to the popular crowd and the displaced.

And continue the tax on Kartat mobilization of mobile phone networks and the Internet imposition of 20% of the kart and airport tax value of a lump sum amount of twenty five thousand dinars per ticket in all Iraqi airports, and raise the property tax rate to 12%.
Falah al-Rubaie, the "long" that "the deduction of 4.8% from the salaries of state employees will affect the movement of the market and enhance the recession experienced by the economy of the country now," said professor of economics at the University of Mustansiriya, noting that "the citizen will tend toward saving for fear the outlook bad from and thus the amount of the purchase of goods. "

"The percentage withheld from employees' salaries if they went to the investment projects will be reflected positively but if you go for government spending and others will affect the country's economy," noting that "the tax doubling the citizens also will affect them and advised in this case the state of the need to reduce expenditures, equivalent to the size of the tax imposed on citizens to ease the burden on the people. "

The Ministry of Finance signed an agreement with the IMF to borrow $ 5.4 billion and the IMF imposed on the government's full salaries and allowances subordinate to senior staff Ath, functional scores and the Supreme own income tax, this tax ranging from 7.5% -15%, while the lower grades it imposes income on nominal salary only, without tax allowances.

On the other hand, said financial expert Abdul Rahman al-Shammari, "long", said that "increasing the proportion of deduction from state employees will affect the movement of the market because some of the staff, the amount of deduction 300 000 dinars, which is a very large sum," adding that "the increased income tax 10% to 15% also hold the problem in the face of rising market prices. "

He pointed out that "the country's economy is suffering from the problem of recession and raising taxes and deductions on employees increases the recession," explaining that "the country needs to be better than increasing the deductions economic solutions through activation of important productive sectors," noting that "the withdrawn funds from tax deductions and fees Where do you go to the popular crowd and displaced people? ".

The country's economy entered a phase of contraction in 2014 when he received the first Sdmtin out a large area of ​​the control of the security forces and increased military spending to liberate the land, and the second shock of falling oil prices on the world market which led to a severe financial crisis experienced. In turn, the deputy head of the Iraqi Economists Association, Bassem Jamil Anton said the "long", said that "the Iraqi state, when the increase deductions from staff ratios are trying to reduce the country's dependence on oil by maximizing internal funding through the imposition of fees and taxes," noting that "in 2017 budget year, the government is trying to get 11 trillion from taxes and fees, and the result will be reflected on all slides after reducing the per capita income. "

Anton added that "the market Stsebha case of deflation and economic due to lack of demand for goods by citizens as a result of the weakness of their income after deductions for tax," pointing out that "the best solution to save the country's economy out of recession is by restructuring the budget and activate the productive sectors such as industry, agriculture, tourism and services ".

Economist stressed that "when you do the productive sectors would inject hard money issued by the country to neighboring countries for the import of foreign goods into the local market and thus ease the ratios of unemployment and poverty."

The Iraqi government refused to comment on this issue despite repeated contacts made by the "long" economists with officials there.

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