A minister told Channel8 that, in today's meeting of the cabinet, the KRG intended to propose to the federal government not to follow the report of the Iraqi State Council and renegotiate the issue on non-oil revenues, because the Kurdistan Region cannot send 120 billion dinars every month.

"The Council of Ministers is scheduled to send a letter to the [Mohammed Shia] al-Sudani government informing it that the Kurdistan Regional Government cannot comply with the content of the consultation of the State Council on non-oil revenues," the minister stated.

Delegation Ready to Negotiate in Baghdad

"The letter asks the Iraqi Council of Ministers not to comply with the advice of the State Council and the two governments to discuss non-oil revenues, because it is no longer able to pay 120 billion dinars every month as non-oil revenues,” the minister noted.

The Council of Ministers is ready to send a delegation to Baghdad to negotiate on non-oil revenues.

Instructions for Finance Ministry Amid Financial Strain

Channel8 has learned that the KRG Council of Ministers instructed the Ministry of Finance to resolve the issue of non-oil revenues, form a high committee to organize expenditures and collect revenues to prepare 120 billion dinars for August, and adapt to the financial situation after the tripartite oil agreement in order to avoid problems with salaries.

Furthermore, the meeting discussed reducing expenditures in general, and according to a report submitted, "the financial situation is bad, and expenditures must be reduced to reduce the size of the deficit."

Although the KRG and Iraqi government and oil companies struck a landmark deal and signed on September 25, and actual oil exports commenced two days later, The issue of non-oil revenues remains a point of talks, which is yet to be resolved.

Deal on Oil Exports Reached, but Non-Oil Revenues Unresolved

The Iraqi State Council, which is an advisory body, last month submitted a report on non-oil revenues to the Iraqi prime minister after meeting with delegations from both sides, which the Kurdistan Region believes was in Baghdad's interest.

One of the main points of the report was that 100% of the customs revenue of the border points of the Kurdistan Region should be handed over to the Iraqi Ministry of Finance.The KRG had previously demanded a 50 percent distribution of the revenue, but the State Council rejected the proposal.

 The State Council has proposed that 50 percent of taxes and fees go to the Kurdistan Region and the other 50 percent go back to the federal government.KRG has previously demanded that all the revenue be its own, and it has been proposed that revenue and taxes be collected in accordance with the laws of the Kurdistan Region and not returned to Baghdad.