KRG finance ministry denies responsibility for salary delays

ERBIL — The Kurdistan Regional Government’s Ministry of Finance has denied responsibility for recent delays in salary payments, rejecting claims that the issue stems from actions by the regional government. The ministry dismissed circulating rumors as “false,” asserting that the delays are not due to an increase in the number of employees or salary increments.

KRG public sector employees have not yet received their July payments. In a statement released Wednesday, the ministry pointed to long-standing administrative and financial disputes between the Kurdistan Region and the federal government in Baghdad as the root cause of the delays.

Since March 2023, the KRG has faced difficulties in paying salaries after the International Chamber of Commerce ruled in favor of Baghdad against Turkey’s facilitation of KRG independent oil exports. Oil sales were the region’s primary source of revenue.

This disruption left the KRG unable to fully pay salaries in 2023, with the last three months of the year remaining unpaid. Despite ongoing negotiations, the KRG and Baghdad have yet to reach an agreement on a regular mechanism for disbursing the KRG’s salary and budget share.

On Feb. 23, 2024, Iraq’s Supreme Federal Court ruled that the KRG must hand over all oil and non-oil revenues to Baghdad and required the federal government to pay the salaries of KRG civil servants. The court also directed the KRG to cooperate with Baghdad on the matter.

The court further mandated that the KRG establish accounts for nearly all public sector employees, retirees, and social welfare beneficiaries at specific government or authorized private banks by the end of March. Instead of complying, the KRG instructed its employees to create accounts on MyAccount, a digital platform launched in September 2023 to streamline salary payments for over one million public sector workers.

Following the court’s ruling, Iraq’s federal finance ministry insisted that without digitalization, it would not release funds to the KRG. However, as part of an interim arrangement, the ministry sent salary payments in cash until June, but no funds have been provided for July. Public sector employees in Sulaymaniyah and Halabja have already begun striking over the unpaid salaries.

The KRG Ministry of Finance noted that it submitted the June payroll list to Baghdad 31 days ago, yet the federal finance ministry has only authorized 1.426 billion dinars—covering just 0.14% of the total required for salaries.

On July 21, the KRG finance ministry confirmed it had submitted the July payroll list to Iraq’s federal finance ministry, covering civil and military employees, pensioners, social welfare recipients, and notarial staff. However, no funds have been allocated for disbursement.

Iraqi MP Soran Omer criticized the KRG government and finance ministry, stating they were unprepared to address the issues with the payroll list. He said, “The KRG has not yet implemented the Federal Court’s decision to digitalize salaries.” Omer added that ongoing audits of the July payroll list by Iraq’s finance ministry revealed significant issues, including thousands of names listed without proper information or official status.

In response, the KRG Ministry of Finance stated, “For several days, false and unfounded claims have been made against the Ministry of Finance of the Kurdistan Region by some parliamentarians and media outlets. They aim to place the blame for the non-payment of salaries on the Kurdistan Regional Government.”

The ministry also addressed concerns regarding duplicated names on payroll lists, explaining that most of these names are legally employed with complete documentation. “If any illegal duplication exists, appropriate actions should have been taken by both the federal and regional finance ministries,” the statement read.

Regarding increased salary amounts for June and July, the ministry clarified that the rise was due to a federal court ruling requiring the salaries of employees and retirees in the Kurdistan Region to match those in the rest of Iraq.

On July 7, the KRG cabinet approved aligning pensions for retirees in the Kurdistan Region with those in the federal government, based on the Unified Retirement Law No. 9 of 2014.

The ministry urged all parties to recognize the ongoing efforts to resolve these issues. “We have been working on this since last year and will continue to do so, hoping that all issues will be resolved by the end of this year,” the statement said. The ministry also called on the federal finance ministry to “cooperate and coordinate” in resolving any remaining technical issues.