The federal government is scheduled to transfer June public sector salary funding to the Kurdistan Regional Government. However, the revenue deduction will leave the KRG facing a 60 billion dinar shortfall, forcing Erbil to secure local loans.

Baghdad has decided to deduct 120 billion dinars as non-oil revenue from the June salary funding for KRG employees. In return, the Kurdistan Region only has 60 billion dinars of prepared non-oil revenue on hand.

120B Dinar Deduction Forces KRG into Loans 

An official from the KRG Ministry of Finance and Economy stated that if Baghdad deducts those 120 billion dinars, Erbil will be forced to resort to local loans to cover the 60 billion dinar deficit so it can distribute the June salaries in full.

Deficits Across KRG After Baghdad Deducts 70 Billion Dinars 

For the May payment, Baghdad disbursed 890 billion dinars after deducting 70 billion dinars to meet a 120 billion dinar non-oil target, toward which Sulaymaniyah contributed 20 billion dinars, and Erbil and Duhok provided 30 billion dinars.

Official data indicates that in May alone, the Sulaymaniyah Governorate recorded a deficit of 38 billion dinars, which includes 10.265 billion dinars allocated toward the sovereign budget. 

Concurrently, the Erbil and Duhok governorates faced a combined shortfall of 42 billion dinars in funding required for employee salaries, alongside an additional 14.735 billion dinars designated for the Kurdistan Region’s sovereign budget.

Finance Minister Summoned as Baghdad Set to Fund Payments 

Meanwhile, the Iraqi parliament's Finance Committee has officially summoned Finance Minister Faleh al-Sari to address ongoing financial disputes and the delayed payment of public sector salaries in the Kurdistan Region.

Al-Sari has instructed the ministry to release the June salaries for the Kurdistan, with a deduction of 120 billion dinars representing local non-oil revenues that must be returned to the state treasury.

Rebwar Karim, a member of the Finance Committee, told Channel8 that Baghdad will fund the salaries today or tomorrow. 

Karim stressed that during the meeting which the Finance Minister attended, he will demand a clarification from the minister regarding when the "game" of sending and withholding salaries will finally end so the issue can be settled permanently for both governments.

Kurdistan Salaries Approved Despite Federal Shortage 

Sherwan Dubardani, a member of the Council of Representatives, earlier confirmed to Channel8 that despite the liquidity issues in the federal government and the fact that members of parliament and council employees have not yet received their salaries, a decision has been made to fund the Kurdistan Region's salaries on Tuesday.