The Iraqi Parliament passed its 2018 Budget Act (the Budget) on 3 March 2018. The Budget includes several measures to support economic growth and fiscal stability as Iraq recovers after the 2017 military defeat of the Islamic State of Iraq and Syria (ISIS) and the drop in global oil prices.
One significant measure is the proposal of a 5% sales tax to apply to the sale of all consumer goods, except items sold as part of Iraq’s ration card system and services provided by beauty salons for men and women.
A new excise tax of 25% applicable to imported sweets, ice cream, dairy, juices, and carbonated drinks, to be levied at the entry ports.
The Budget Also included the following taxes:
- Sales tax on mobile and internet recharge cards is 20%
- Sales tax on restaurants and hotels in accordance with the provisions of the Revolutionary Command Council Resolution No. 36 of 1997
- Airport tax equal to 25,000 Iraqi dinars (US$21) levied on airline tickets for international flights and 10,000 Iraqi dinars (US$8) levied on airline tickets for domestic flights
A penalty for the importation of alcoholic beverages levied at the entry ports is 200%.
