Shafaq News – Baghdad
Iraq’s caretaker cabinet has reimposed a 20% tax on mobile phone and internet recharge cards as part of efforts to boost state revenues and narrow the budget gap, an official told Shafaq News on Wednesday.
Economic expert Mohammed Al-Hassani said that the tax imposed on telecom companies falls under income tax regulations, making the companies themselves responsible for paying it. He stressed that companies are not legally entitled to raise prices unilaterally for consumers.
Telecom firms often attempt to offset the tax by increasing prices for users, a practice he described as unfair and in need of strict oversight, Al-Hassani stated, noting that the increase is unjustified given the weak and costly telecommunications services in Iraq.
Journalist Hassan Hamed Shafaq News that the government is seeking to shore up the budget “at the expense of citizens” by reinstating the tax on phone recharges, pointing to what he described as excessive salaries and allowances for ministers and lawmakers, as well as inflated project budgets, which he argued should be reviewed before placing additional burdens on the public.
Mohammed Ali, who owns a phone recharge card shop, pointed to Shafaq News that the tax does not affect retailers as much as it impacts subscribers, explaining that any increase imposed by telecom companies will ultimately be passed on to customers.
In October, Iraq’s parliamentary Communications Committee disclosed that telecom companies owe the government billions of dollars in unpaid dues—an amount lawmakers said could cover nearly half of public sector salaries—urging authorities to recover the funds to strengthen non-oil revenues amid limited oversight of a highly profitable sector.
Iraq’s parliament first approved a 20% tax on mobile phone recharge cards in 2015 during a period of severe austerity triggered by falling oil prices. In 2022, the government headed by Mohammed Shia Al-Sudani cancelled the tax. On October 23, the government reinstated the levy on mobile and internet recharge cards as part of a broader policy aimed at increasing revenues and reducing public spending.
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