The Iraqi Political Economic Center warned of the repercussions of imposing taxes and fees on the prices of gasoline, kerosene and refinery products within the 2023 budget, indicating that people with limited income will be the biggest losers.

The director of the center, Wissam Hadmal Al-Helou, said in a statement, “There are indications that the draft budget for 2023 includes fees of 5% on the quantities of gasoline and kerosene sold to citizens, and the imposition of a 5% tax on Iraqi refinery products and 15% on the value of what is sold of imported derivatives.”

He added, “These taxes, through which it is intended to add 450 billion dinars to the state treasury, will add additional costs that burden the citizens and will cause an economic downturn in the country that is paid for by the private sector due to the dependence of the majority of laboratories and factories on oil derivatives, not to mention the increase in transportation costs for citizens, especially those with limited income who depend on private transportation.”

Al-Helou pointed out that “Iraq consumes between 28-30 million liters per day of fuel, and a high amount of it is imported, and imposing a 15% rate on each liter consumed will mean a general rise in prices ranging between 15-20% over the current prices, to add a new burden on citizens who suffer from the burdens of high prices due to the greed of some merchants with the advent of the month of Ramadan, as well as the high cost of foodstuffs caused by the Russian-Ukrainian war, which affected Iraq.

He warned that “adding such price ratios to fuel will further complicate the economic situation, with fluctuations in the exchange rate and the government’s inability to control it, and the impact of this on production costs and imported materials, which clearly raised prices in the market, which reduced the value of the Iraqi dinar, which needs deliberate decisions to return to its previous recovery against the dollar.

Al-Helou pointed out that “the government is called upon to study its plans again and not be drawn into solutions that do not match the rentier Iraqi economy, in which spending on salaries provides liquidity in the market in light of the continuous inability to find a private sector capable of providing resources that provide additional income for citizens that increase their purchasing power as well as enables the state to seek the help of a major partner that supports its economy.

He stressed that “the government should put before issuing any decision its repercussions on people with limited incomes and not implement plans that target groups that it considers to have high purchasing power, while previous experiences confirm that the poor citizen is the biggest loser.”

Source: National Iraqi News Agency