Tax cuts to ease living
conditions, spur business, official says
By Sameer Nasser
Azzaman,
July 13, 2005
Iraq has slashed income tax to 15% from 49% and
substantially increased the minimum sums individuals can earn net of tax.
The
progressive tax system replaces a 1982 law under which individuals had to pay
49% of income beyond certain salary brackets.
The
current tax system is progressive. It starts with 3% up to a maximum of 15%.
“The
figures show that there is a huge gap between the former and current income tax
systems,” said head of Tax Authority Muhssen Abujuaila.
Parents’
income is only taxable if together they earn more than 4.5 million dinars. Besides, there are allowances of 400,000 dinars annually for each child.
Previously,
annual incomes beyond 1.6 million dinars were taxed.
Under the
former regime civil servants were exempt from tax because of their meaningless
salaries. On average a civil servant would earn 5,000 dinars
(two
Salaries
of civil servants have increased substantially in the past two years, with many
of them earning more than one million dinars a month.
Companies have
seen their taxes slashed from 35% to 15%.
However,
companies have not made a lot of benefit from the drastic tax cuts in earnings.
Most of
the country’s factories are idle either for security reasons or the influx of
cheap imports from
