Iraq imposes 50% tax on imports

[rsskelton]

Iraq imposes 50% tax on imports

By Ali Shattab

Azzaman, June 2, 2012

( I wasn't really sure where to post this. It has a link, but I still put it in the "Opinion" section to be safe )

Link:

http://www.azzaman.com/english/?p=117

The government has slapped a 50% tax on all goods entering Iraq. The rule is to come into force by the beginning of July this year.

The decision has raised fears of a substantial hike in all foreign goods entering the country. With the Iraqi industry still in shambles, the surge is bound to affect almost all commodities in Iraq.

Tariffs on goods entering and leaving Iraq were removed shortly after the 2003-U.S. inflation as part of what U.S. administrators saw as measures to revive the economy.

But the decision led to an unprecedented influx of foreign goods into Iraq at rates much cheaper than locally produced counterparts.

Some Iraqi economists see the 50% tax rate is too high and have asked the government to reconsider its measure.

“The application of the new tariffs will lead a hike in prices of imported foreign goods. If one item used to cost 10,000 dinars, its price will reach 15,000 dinars,” said Tareq Hareb, an economist and law expert.

He said he would rather see the new law either postponed or the tax rate reduced.

For nearly 13 years (1990-2003), Iraq was under punitive U.N. trade sanctions banning foreign imports into the country.

Prior to sanctions, Iraq’s domestic industry was thriving and the private sector meeting part of local needs.

But wars and sanctions prevented industrial growth and brought many industries to a standstill.

Following the U.S. invasion, efforts to revive domestic industry failed mainly due to power shortages and the flooding of Iraqi markets with cheap, tariff-free imports particularly from neighboring states Turkey and Iran.

[skrappyone]

I have read this before and I still agree 50% is to high. There is no way that I see them able to inpose any tax until they RV their currency. I am glad that they have implemented the tax because I believe we are closer than ever to getting to the end of this ride. GO RVVVVVVVVVVVV.

[jerry333]

This is great, great news for us. If they impose a 50% tax on imported goods, then they need and will raise the value of the dinar for the people. This will hurt imported goods, increase domestic production, and a revalued dinar will help the people. I see this as a good way to help the people of Iraq. JMO What do you think? I am interested in other opinions, as this looks like a win for Iraq people and for people that hold dinar.

[fishing]

I think we are almost there, good post rsskelton

[rsskelton]

This is great, great news for us. If they impose a 50% tax on imported goods, then they need and will raise the value of the dinar for the people. This will hurt imported goods, increase domestic production, and a revalued dinar will help the people. I see this as a good way to help the people of Iraq. JMO What do you think? I am interested in other opinions, as this looks like a win for Iraq people and for people that hold dinar.

Not a lot more to say. I totally agree with you. Could not have said it better. +1

[Luigi1]

This will choke the economy & make it more difficult for the ordinary Iraqi to make do.

A 6% duty is plenty. Then phase in a economic free trade zone with Gulf States over time as they phase in the one Gulf States currency.

[Captjohn]

50% tariffs may well be too high, but none the less it puts a great deal of pressure on the CBI to pull the trigger on the RV before the taxes are put in place. Can you imagine allowing....legislating...that prices of imported goods rise by 50% for the consumers....and leave them with toilet paper currency to pay for them with? Only a country bent on suicide would allow that to happen, and Shabibi is no amateur. IMO, GOI, ministers, and all aside, this sets up a great scenario that all but requires an RV to happen before the end of the month.

[bamjack75]

A neutral event (lop) will not do much in helping with this. Ha! Ha!

[NoviceInvestor]

Outrageouls high tariff..Pricing industry and goods out of reach at present rate of dinar value... But it may like the rest of monetary and Government policy in Iraq..Something to bring up for discussion to make is appear that the GOi is proactive..Just my thoughts

[magawatt]

They set it that high so not just anybody could get a Beemer.

[skitealwedrop]

This will choke the economy & make it more difficult for the ordinary Iraqi to make do.

A 6% duty is plenty. Then phase in a economic free trade zone with Gulf States over time as they phase in the one Gulf States currency.

Thanks for the post Luigi. It's nice to know that there is someone that has some common sense. A 50% tax on Iraqi imports is ludicrous and will NEVER happen. The Iraqi's rely on imports to sustain every day life, as lousy as it may be for the average Iraqi.

Iraq needs an internationally trade able currency with a value that is similar to the value of the USD in order to progress economically. That's my opinion.

[desimo]

This sounds good for the RV. If the goods are being taxed 50% then the market of those goods will have to reflect the mark up. Unless the people have a liveable standard of life they will not be purchasing much of anything. This could be very good for us.

[NoviceInvestor]

Desimo I agree but remember this is Iraq we are talking about and the people seem (or so it seems) to accept their standard of living as norm ,,but then again they have been living without goods and services for years so perhaps they acce[t it as the norm.

[KamelKeeper]

"The government has slapped a 50% tax on all goods entering Iraq. The rule is to come into force by the beginning of July this year...."

Does that sound like an Iraqi statement to you? If this were true and the tariffs were 50% on all imported goods, which is highly unlikely, the Economic/Finance Commitee would have had to vote on it, as well as the Council of Ministers. None of them are mentioned. The current tariff schedule runs between 1% and 40%, with anything above 20% being rare. Dates are 40%. This is Maliki fear based propoganda due his cronies out on the hinter lands of Iraq's borders bringing in inferior goods and food. The crony importers do not want regulations so that they can continue dumping rotting food and old pharmaceuticals, etc. The Iraq/Syrian border has a tariff / customs system in place and the Iraqis collected $144 million year to date for 2012. But they do not allow the inferior goods across the border. I read where the tariffs tax should be a $39 billion a year revenue source. With that money would come regulatory organizations to improve and protect the goods and people of Iraq. Who would not want that other than a crook?

Bottom line: this article is BS, bogus, propoganda,...........don't believe everything you read. Anybody want to buy VND (dong). It's only $1,000. per million. Call me.

Edited June 5, 2012 by KamelKeeper

[skitealwedrop]

This sounds good for the RV. If the goods are being taxed 50% then the market of those goods will have to reflect the mark up. Unless the people have a liveable standard of life they will not be purchasing much of anything. This could be very good for us.

A 50% markup due to taxation of imports is insane, and beyond belief. The average Iraqi lives in poverty today. Why do you suggest that such an increase would benefit investors. I would think that the net effect would result in the opposite.

[DWitte]

The Iraqi's do have an international traded currency. I thought they were using dollars.

[powerpager]

Good One Scrappy Cocoa !!

[semichdave]

50% ???? Maybe they need to raise the zeros on that figure to and make it 5%. Translation difference/typo maybe? I am going to sit back down at the smarta$$ table now.