At a Glance

• The Iraqi Cabinet slashes raw material customs duties to 1% to boost local manufacturing.
• Council of Ministers adopts IQD 2.5 trillion for regional development projects.
• SOMO is officially exempted from urgent travel expenditure-reduction measures.
• Failed third-intermediate and sixth-preparatory students receive an extra exam opportunity.

The Iraqi Council of Ministers held its 16th regular session on Monday, implementing sweeping economic adjustments, budget allocations, and legislative referrals.

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Key Statement and Focus Area

• The Prime Minister’s Media Office stated that the session covered discussions on the country's general situation, an agenda review, and the enactment of necessary decisions.
• To accelerate economic diversification and stimulate local manufacturing, the Council of Ministers enacted sweeping customs reforms. 

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As part of strategic efforts to maximize non-oil revenues, the Cabinet approved an amendment to Council of Ministers Resolution No. 24413 of 2024. 

The new directive sets a unified 1% customs duty on raw materials, production lines, and production inputs for all local industries and expansions. Additionally, the Council postponed the tax assessment for private generator owners until November 1.

The Cabinet rectified its Resolution No. 25 of 2026, officially allocating IQD 2.5 trillion listed under the Expenditures and Deficit section to Regional Development Projects. 

For petrodollar allocations totaling IQD 2 trillion, the provisions of Federal General Budget Law No. 13 of 2023 will apply to unspent or unfunded 2025 balances recorded in trust accounts.

To maintain marketing flexibility, the State Organization for Marketing of Oil (SOMO) was exempted from the official travel expenditure-reduction measures mandated by Resolution No. 1083 of 2025. 

Furthermore, the Ministry of Finance was authorized to provide IQD 5.3 billion to the Prime Minister’s Office to support the National Cybersecurity Center.

On the legislative front, the Council approved the draft International Crimes Law reviewed by the State Council and referred it to parliament. To combat the red palm weevil agricultural threat, the Ministry of Agriculture was exempted from Government Contract Implementation Instructions No. 1 of 2025, enabling a contracted supplier to ship pesticides before completing letter-of-credit procedures to prevent crop delays.

The session concluded by granting an extra exam opportunity to third-intermediate and sixth-preparatory students who failed up to four subjects during the 2025–2026 academic year.

FYI

Iraq’s measures to cut industrial import taxes to 1% come as a severe maritime blockade in the Strait of Hormuz chokes off traditional seaborne crude exports, creating a multi-trillion dinar fiscal deficit that necessitates rapid non-oil revenue growth. 

The county is actively implementing the automated ASYCUDA digital customs system across all border crossings to modernize trade frameworks and maximize non-oil revenue collections.

To mitigate a severe fiscal crisis triggered by a maritime blockade, the government is also legally securing regional infrastructure funding to prevent centralized budget absorption and authorizing critical diplomatic flexibility to establish alternative overland energy export routes.

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