KRG Rejects Iraqi Deputy Speaker's Allegations, Claims It Has Fulfilled Revenue Obligations

Peregraf- The Kurdistan Regional Government (KRG) has rejected allegations that it failed to transfer agreed-upon revenues to Baghdad, responding one day after Iraq's First Deputy Speaker of the Council of Representatives, Adnan Faihan al-Dulaimi, a member of the Conquest Alliance and head of the al-Sadiqoon parliamentary bloc, called on the federal government to suspend financial transfers to the Kurdistan Region. 

In a statement issued Tuesday, the KRG Ministry of Finance and Economy's Directorate General of Accounting claimed the regional government had fulfilled all obligations required under Iraq's Financial Management Law and the federal budget law, while accusing Baghdad of failing to fully fund the region's budget entitlements.

The ministry's statement marks the latest escalation in a long-running dispute between Erbil and Baghdad over budget transfers, non-oil revenues, and the implementation of agreements governing the financial relationship between the two sides.

"The Kurdistan Region has fulfilled all its obligations stipulated in the Financial Management Law and the Federal General Budget Law," the ministry said, adding that it remains prepared to address any financial observations or settlements through legal and institutional mechanisms.

The statement came after al-Dulaimi urged the federal government to halt all financial transfers to the KRG until what he described as outstanding obligations owed by the region are fully settled. He argued that continuing transfers without a comprehensive reconciliation would violate the federal budget law and could expose the government to legal and parliamentary accountability.

Al-Dulaimi claimed the KRG had failed to transfer the amounts specified in agreements and audit reports despite continuing to receive federal funding for public-sector salaries. He said a new agreement reached at the end of 2025 set the monthly payment at 120 billion Iraqi dinars, with a ten percent annual increase, bringing the amount due in 2026 to approximately 132 billion dinars, and that the KRG had been transferring only between 40 billion and 50 billion dinars per month — well below the agreed figures.

In its response, the KRG said it transferred the federal treasury's share of non-oil revenues throughout 2025 in accordance with agreements reached with Baghdad and the provisions of federal law.

The ministry claimed that while the region met its obligations, Baghdad funded salaries and budget entitlements for only ten months of 2025, leaving November and December unpaid, even as employees elsewhere in Iraq continued to receive salaries during those months.

The statement further said that the Kurdistan Region transferred the federal treasury's share of non-oil revenues during the first five months of 2026 under existing agreements between the two governments.

According to the ministry, revenues declined significantly during March and April because of regional security conditions — a reference to the US-Israel War on Iran — and delays in implementing the ASYCUDA customs management system at the Kurdistan Region's border crossings. The KRG characterized the delay in implementing the system as part of broader federal measures that effectively imposed economic pressure on the region.

The ministry said that, due to reduced revenues, an agreement had been reached with the previous federal government allowing the region to transfer 50 percent of its non-oil revenues during that period. It added that discussions over ASYCUDA implementation have largely been completed but that Baghdad has yet to issue the final decision needed to put the system into operation.

The KRG also criticized what it described as the unequal application of federal budget provisions, arguing that the mechanism of "actual spending" has been applied exclusively to the Kurdistan Region, resulting in incomplete funding of the region's constitutional budget share and employee salaries.

"It would have been more appropriate to pursue legal and constitutional remedies," the ministry said, arguing that all Iraqi citizens should be treated equally regardless of where they live.

Regarding May specifically, the ministry said the KRG transferred 50 billion Iraqi dinars in non-oil revenues to the federal treasury that month, but that the Federal Ministry of Finance subsequently deducted 70 billion dinars from the salary funding it sent — without accounting for the decline in the region's revenues.

The exchange reflects the ongoing disagreement between Baghdad and Erbil over the implementation of Iraq's 2023 federal budget law, which requires the KRG to transfer oil and non-oil revenues to the federal treasury in exchange for receiving its share of federal expenditures, including public-sector salaries.

The financial relationship between the two governments has remained one of the most contentious issues in Iraqi politics since 2003. Disputes over oil exports, customs revenues, budget allocations, and constitutional authorities have repeatedly strained relations between Baghdad and Erbil.

The latest confrontation comes as negotiations continue over the resumption of Kurdish oil exports and the implementation of revenue-sharing arrangements that both sides say are necessary to stabilize the region's finances and ensure regular salary payments for public employees.