Iraqi Parliament's First Deputy Speaker Calls for Suspension of Budget Transfers to Kurdistan Region

Peregraf- Iraq's First Deputy Speaker of Parliament, Adnan Faihan al-Dulaimi, has called on the federal government to suspend financial transfers to the Kurdistan Regional Government (KRG) until what he described as outstanding financial obligations owed by the region are fully settled, escalating an already contentious dispute between Baghdad and Erbil over revenues and budget payments.

In a statement, al-Dulaimi urged the federal government to stop transferring funds to the Kurdistan Region until a comprehensive financial reconciliation is completed in accordance with Iraq's federal budget law and audit reports jointly prepared by Iraq's Federal Board of Supreme Audit (FBSA) and the Kurdistan Region's Board of Supreme Audit (KRSA).

He warned that any transfers made without such a settlement could expose the government to legal and parliamentary accountability.

The dispute centers on the implementation of Iraq's 2023 federal budget law, which requires the Kurdistan Regional Government to transfer oil and non-oil revenues to Baghdad in exchange for receiving its share of federal spending, including public-sector salaries.

According to al-Dulaimi, the previous federal government transferred funds to the Kurdistan Region to cover employee salaries for five months in 2025 despite not receiving the non-oil revenues that the region was obligated to hand over under the budget law and subsequent agreements between the two sides.

He alleged that Baghdad also reduced and waived portions of the amounts identified in joint audit reports without having the legal authority to do so.

Al-Dulaimi said audit reports issued in 2025 determined that the Kurdistan Regional Government should transfer approximately 391 billion Iraqi dinars, or about $300 million, in non-oil revenues each month to the federal government.

According to his account, a ministerial committee later reached an agreement with the Kurdistan Regional Government to reduce that amount to 200 billion dinars per month. However, he said the regional government failed to comply with the revised arrangement despite continuing to receive federal salary payments.

He further stated that a subsequent agreement reached at the end of 2025 lowered the required monthly transfer to 120 billion dinars, with an annual increase of 10 percent, bringing the amount due in 2026 to roughly 132 billion dinars per month.

Al-Dulaimi claimed that while Baghdad continued to finance salaries for public employees in the Kurdistan Region, the KRG transferred only between 40 billion and 50 billion dinars per month during the first months of 2026, well below the amounts specified in agreements and audit reports.

The financial relationship between Baghdad and Erbil has been one of the most persistent disputes in post-2003 Iraq. The two sides have repeatedly clashed over oil exports, customs revenues, budget allocations, and the constitutional powers of the Kurdistan Region. Disagreements intensified following the suspension of Kurdish oil exports through Türkiye in 2023, which significantly reduced the region's revenues and increased its reliance on federal budget transfers. 

Officials in the Kurdistan Regional Government have previously argued that financial obligations should be addressed through negotiation and mutual agreements, while Kurdish leaders have accused Baghdad of using budget transfers as political leverage.

Al-Dulaimi said adherence to the federal budget law and official audit reports remains essential for regulating financial relations between Baghdad and Erbil and ensuring the protection of public funds.

The Kurdistan Regional Government had not publicly responded to al-Dulaimi's latest remarks at the time of publication.