Iraq's payroll deductions generate a monthly revenue of $48 million

Shafaq News/ The Iraqi government’s decision to deduct 1% from the salaries of employees and retirees, for humanitarian aid to Lebanon and Gaza, has sparked widespread controversy and public opposition.

Economic expert Mohammed Al-Hassani revealed on Monday that these deductions generate approximately 70 billion dinars ($48 million) monthly.

“There is widespread public opposition among employees and retirees to this measure,” Al-Hassani told Shafaq News, describing the policy as a form of corruption and urging Parliament to intervene immediately.

Al-Hassani noted that many affected individuals initially believed the deductions were voluntary, with options to opt out through administrative requests. However, these requests were categorically rejected by government ministries and departments, leaving no recourse for employees and retirees.

The controversy deepened this week when retirees reported retroactive deductions applied to their salaries for two months. Many described the deductions as “unjust and unexpected,” citing their impact on already strained household budgets amid rising living costs.

The Basra office of the High Commission for Human Rights called on the National Retirement Authority to review the 1% deductions.

“There are cases where some retirees were subjected to deductions exceeding 1%, including deductions of 1,000 dinars from a 100,000-dinar salary and 10,000 dinars from a 1 million-dinar salary for two months, which requires attention from the Ministry of Finance and the Federal Financial Audit Bureau,” the office explained.

In November, the Iraqi Cabinet approved the Ministry of Finance’s decision to deduct 1% from the salaries, allowances, and pensions of all state institutions for “voluntary donations” to be deposited into accounts for supporting Gaza and Lebanon, either equally or based on priorities determined by the Prime Minister.

Employees or retirees who wish to opt out of the contribution can submit an official request to their respective minister or the head of an independent agency, expressing their choice.

Legal experts have questioned the constitutionality of the deductions, citing Article 28 of Iraq’s Constitution, which prohibits imposing taxes or fees without legislative approval.

“If the deduction were truly voluntary, the request would be made for the deduction, not the reverse. Therefore, the decision is effectively mandatory and legally unconstitutional,” legal expert Mohammad Jumaa explained.

Since the beginning of the war in Lebanon, Baghdad has quickly mobilized both government and private sector efforts, sending food, fuel, and hundreds of tons of aid to Lebanon.

As for Gaza, alongside Iraq's official stance in support of the Palestinians, the country has also sent hundreds of tons of humanitarian aid.