KRG suspends taxes for businesses amid federal negotiations

ERBIL – The Kurdistan Regional Government’s Prime Minister Masrour Barzani has ordered the suspension of taxes for several business sectors, according to Peshawa Hawramani, the KRG’s spokesperson.

Hawramani announced on his Facebook account on Tuesday that restaurants, hotels, private hospitals, and bakeries will be exempted from paying taxes until the KRG and federal government unify their tax regimes.

The measure is likely to provide relief to these businesses, which have long complained about high tax rates amid a stagnant business climate.

KRG and federal officials have been negotiating for the past year to establish joint mechanisms for managing financial issues, including border gate revenues and internal revenues such as taxes and fees on government transactions.

The KRG has been relying on Baghdad for the bulk of its budget since its independent oil exports through Turkey were halted in March 2023 by a ruling from the International Chamber of Commerce’s International Court of Arbitration.