Iraq-KRG salary row escalates: Baghdad cites revenue holdout

Shafaq News/ The delay in disbursing May 2025 salaries in the Kurdistan Region stems from the Kurdish government’s “failure” to transfer oil and non-oil revenues to the federal treasury, Iraq’s Finance Ministry stated on Thursday.

In a statement, the ministry explained that funding had been allocated in accordance with the Kurdistan Region’s quota under the federal budget law. However, the Regional government’s decision to withhold its revenues caused expenditures to exceed the limits set by both the budget law and a ruling by the Federal Supreme Court.

The ministry noted that this overextension obliges it to take legal steps, as required by the court’s decision and the provisions of the current three-year federal budget. Despite the dispute, federal authorities reassured the public that they remain committed to timely wage disbursements. Salaries for May were fully covered for all eligible recipients, as confirmed, with funding secured independently of both oil and non-oil revenue borrowing.

Earlier, the Kurdistan Region’s Ministry of Finance and Economy called on the federal government to continue disbursing salaries for civil servants, retirees, families of martyrs, Anfal victims, and social welfare recipients, on par with the rest of Iraq. The ministry also urged Baghdad to avoid introducing what it described as ‘unconstitutional barriers to the salary funding process’’.

Jamal Kocher, a member of the Parliamentary Finance Committee, told Shafaq News that over 1.2 million public employees in the Kurdistan Region would be directly affected.

Kocher stressed that “a series of steps must be taken to resolve this issue,” urging Prime Minister Mohammed Shia al-Sudani to “respond to Iraqi citizens in a manner that promotes fairness. It is unacceptable for employees in Iraq to receive their salaries while those in the Kurdistan Region face cuts.” He also emphasized the need to engage the Federal Supreme Court to take further decisions on the matter.

The MP also pointed to a “drain on resources in Baghdad,” explaining that the capital exports four million barrels of oil daily, holds over twenty border crossings, and operates the Al-Faw Port—yet, despite this, revenues are not being properly directed to the state treasury.

Notably, the salary dispute between Baghdad and the KRG has remained unresolved for years, re-emerging during each annual budget cycle. The federal government conditions the transfer of the Region’s budget share on the handover of oil revenues—a process that stalled in 2023 after exports through Turkiye’s Ceyhan port came to a halt. Since then, salary payments from Baghdad have been treated as advances rather than regular allocations.

In February, the Federal Supreme Court issued a binding decision requiring the federal government to pay public sector salaries in the Kurdistan Region directly, bypassing the KRG. The ruling came after repeated delays in disbursing wages to the Region’s employees.