At a Glance

• A senior KRG Finance delegation met with Iraqi Finance Minister Faleh al-Sari in Baghdad.
• Total transparency in disclosing financial data was declared a prerequisite for a realistic budget.
• The official drafting process for the 2027 federal budget bill starts this coming Saturday

A senior delegation of the Kurdistan Region Ministry of Finance met with federal Finance Minister Faleh al-Sari on the drafting of the 2027 budget bill, with the Iraqi side calling for bilateral talks with a KRG delegation in the coming days and emphasizing that total transparency is vital to finalize a realistic national budget.

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Key Statement and Focus Area

• The Finance Minister noted that the Ministry has made "advanced strides in completing the requirements for the program and performance budget."
• The talks centered on the findings of specialized working groups, while also evaluating submitted feedback and proposals to finalize the project's requirements.

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Minister al-Sari met with a delegation from the KRG, members of the Council of Representatives, and representatives from various ministries, governorates, and government entities on Thursday.

Led by KRG Director General of the Budget Makwan Jamil and Director General of Accounting Kovan Tahsin, the bilateral discussions focused heavily on transitioning the state's financial architecture toward a performance-based program budget system.

The federal Finance Ministry said in a statement that the officials reviewed "the milestones achieved across the budget preparation phases" in accordance with approved timelines.

Al-Sari explained that completing the program and performance budget requirements "aims to shift focus away from the sheer volume of financial allocations and toward measuring actual results and achieved targets by linking budgets directly to programs, projects, and performance indicators."

He called for "bilateral meetings to be held between the relevant budget preparation committees and the KRG delegation over the coming days."

The minister highlighted that "complete transparency in disclosing financial data and revenues is an essential prerequisite for achieving a realistic and accurate budget."

The Ministry stated that the sessions are part of an ongoing process to complete the program and performance budget project, establishing a foundation for a gradual transformation in the state’s general budgeting methodology.

The drafting process for the 2027 federal budget bill is scheduled to officially commence in Baghdad this coming Saturday.

Following its completion, the draft legislation will undergo a one-month review period by the Council of Ministers before being forwarded to Parliament.

The bill is ultimately slated for submission to the Iraqi Council of Representatives for final legislative approval on October 10 of this year.

FYI

The Kurdistan Regional Government Ministry of Finance has requested an allocation of approximately 29 trillion Iraqi Dinars (IQD) as its regional budget share, officially submitting the supporting financial data on August 21.

The requested funding package encompasses outstanding financial entitlements for retirees from 2025 and 2026, which were previously withheld by Baghdad, in addition to funding for 12-month end-of-service retirement bonuses.

The active participation of the KRG delegation within the federal budget preparation committee represents a significant turning point in the financial and diplomatic relations between Erbil and Baghdad.

Kurdish officials are demanding that the Kurdistan Region's share of the 2027 Iraqi federal budget be increased to 14.1% based on the latest general population census data. 

This proposed allocation represents a significant increase from the previous fixed budget baseline of 12.67%, with KRG officials emphasizing that the census-backed figure is critical to secure full funding for local investments and public sector expenses.