A “trap” that permeates the amendments that affected the 2021 budget .. 5 points that are “inconclusive” and subject to different interpretations .. The Ministry of Finance should intervene

2021-02-06

Yes Iraq: Baghdad

The 2021 budget, after making amendments to it by the Finance Committee in Parliament, was described as a “new” budget and totally different from the budget submitted by the government and the Ministry of Finance, due to the comprehensive and wide changes it had undergone by the Finance Committee.

Although some of the paragraphs were described by specialists as an "achievement", other paragraphs were considered by experts as "loopholes" left by the amendments of the Parliamentary Finance Committee, while it remains worth noting that all the amendments are "unconstitutional" and Parliament has no right to amend the entire budget, but rather it is a governmental matter. However, the absence of the Federal Court gave Parliament the green light for the amendments without waiting for an appeal from the government with these changes.



Among the amendments that some experts recorded their observations on, and according to what the economist Nabil Al-Marsoumi described in a clarification received by "Yis Iraq", the committee did not clarify whether the abolition of the clause withholding the salaries of employees entirely or subjecting their total salaries to the Income Tax Law No. 113 1982 and its amendments.

Where the committee confined itself to saying: “All deductions have been canceled in the 2021 budget, as it remains unknown whether the intention is to cancel the deductions and remain in the application of the tax law?



Al-Marsoumi stated that "the budget deficit was 71 trillion dinars in the government budget, not 76 trillion dinars, and that the deficit was 43%, not 47%, as stated in the statement of the Finance Committee," indicating that "the volume of new public expenditures will decrease to 130 trillion dinars and public revenues will increase." To 105 trillion dinars, an increase of 13 trillion dinars, of which 5 trillion dinars came from adjusting the price of a barrel of oil in the budget from $ 42 to $ 45, and it seems that most of the remaining amount will be through raising the price of a barrel of crude oil sold to the refineries from 3.5 to 17.5 dollars, which is what This will lead to an increase in fuel prices, an increase in the cost of transportation, and thus an increase in the prices of goods and services.

He added, "The committee did not specify the size of the amounts allocated to compensate the private sector for changing the exchange rate of the dinar, as well as the large additions made by the Finance Committee to public expenditures, which were not all specified in numbers, which is very important when preparing budgets because it may lead to an increase in the deficit instead of reducing it." .



He pointed out that "it is necessary to return the budget again to the Ministry of Finance because the amendments to the Finance Committee need to be scrutinized and in order not to be repeated again what the Finance Committee did from the mistakes of the year 2019 when making amendments to the retirement law."



For his part, the expert in economic affairs, Raad Twig, said, "The Parliamentary Finance Committee's vote to reduce the fiscal budget deficit for the current year from 76 trillion to 25 trillion is a major achievement for the committee and the country's economy."



Twig said, "Reducing the deficit announced by the Parliamentary Finance Committee is a distinguished economic achievement that reflects the great economic performance of the committee, even if it is economically desirable to reduce the deficit in order for the available resources to match the amount of planned spending."



He added, "We hope to switch from the rentier-financed budget to the budget with financing from real economic sectors, as it is not correct to expand external borrowing to finance the budget, which means falling into the net of external debt."



He pointed out that “reducing the salaries of the three presidencies by 20% is unfair, and it should have been reduced to 50%, stressing:“ The expansion of the expenditures of the three presidencies is at the expense of depriving the people of important financial resources to improve their standard of living, and these are lost resources among the three presidencies. The budget must be rational and guiding.



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