Tax confusion hits Iraq’s imported medicine supply
Shafaq News
In Iraq, where the healthcare system depends heavily on imported medicines, even the suggestion of changes to customs tariffs can ripple quickly through pharmacies, markets, and households. That tension resurfaced after reports circulated that new customs tariff schedules took effect from January 1, 2026, raising fears of higher medicine prices.
The Iraqi Pharmacists Syndicate moved swiftly, cautioning that the measures could unsettle the pharmaceutical market and disrupt the country’s tightly regulated pricing system. Iraqi officials pushed back, framing the move as a technical “correction” rather than the introduction of new taxes. Yet market behavior has pointed in another direction, with price volatility, trader unease, and public confusion exposing deeper institutional fragilities in Iraq’s economy.
Tenfold Increase
Speaking to Shafaq News, Haider Fouad Al-Sayegh, head of the Iraqi Pharmacists Syndicate, described the issue as highly sensitive. Appeals from pharmacists importing medicines and pharmaceutical raw materials, he explained, revealed a clear increase in customs tariffs scheduled to take effect during January.
The change surfaced during the completion of pre-declarations in the ASYCUDA system, where tariffs appeared to rise from 0.5% to 5% on medicines and could reach 30% on other items, based on Cabinet Decision No. 957 of 2025, an increase amounting to ten times the previous rate. Attached schedules to Cabinet decisions reflected the shift explicitly, Al-Sayegh noted, warning that such an adjustment would feed directly into medicine prices paid by consumers.
The syndicate formally addressed the prime minister and the health minister, urging authorities to halt any changes to medicine tariffs due to their immediate impact on the national drug pricing framework.
Conflicting Explanations
The General Customs Authority later indicated that no actual change had been enacted, attributing the figures appearing in tariff tables to a “printing error.” An official correction, the authority said, remains pending.
At the same time, the syndicate has tracked updates to the ASYCUDA pre-declaration system by the General Tax Authority, seeking to ensure alignment with the anticipated correction and avoid disruptions to import procedures.
Medicines, Al-Sayegh stressed, occupy a unique position in Iraq’s market. They are the only commodities subject to centralized official pricing, with import and production costs forming the backbone of the final retail price. Any increase in those costs, he cautioned, would be reflected immediately at the pharmacy counter.
Read more: Delayed reform or fiscal shock? Iraq’s tax measures test state capacity
Pricing Under Pressure
From an economic standpoint, international economics professor Nawar Al-Saadi told Shafaq News that public concern over additional fees or taxes on medicines is “well-founded,” noting that pharmaceuticals are essential goods rather than discretionary purchases.
Even if reported increases prove inaccurate, Al-Saadi said, any added cost at the import stage would almost inevitably reach consumers, given Iraq’s near-total reliance on foreign suppliers and the dollar-linked nature of medicine pricing. Sound fiscal policy, he added, requires a clear distinction between luxury goods and essential items, warning that poorly calibrated measures risk placing additional pressure on patients without stabilizing the market or delivering meaningful reform.
Despite official denials, uncertainty has already filtered into daily transactions. Some pharmacies and shops have raised prices on certain medications, reflecting caution among traders and distributors navigating unclear signals.
Speaking to our agency, Ali, a 54-year-old Baghdad resident, described growing anxiety over the cost of medicines needed for chronic conditions. Rising prices, he said, have at times forced delays in purchasing treatment or a turn toward lower-quality alternatives, affecting thousands of families, particularly elderly citizens and those on limited incomes.
Amid the debate, the General Customs Authority released a statement affirming that reports of a “tenfold increase” in customs tariffs on medicines do not reflect current legislative or executive practice. The 0.5% tariff on medicines remains unchanged.
The authority clarified that adjustments applied only to certain medical supplies, where tariffs increased from 4% to 5% as part of an effort to standardize rates previously applied inconsistently. Essential medicines and humanitarian medical items, it said, continue to benefit from legal exemptions and facilitation measures.
Even so, the Iraqi Pharmacists Syndicate has maintained that any shift in import-related costs —regardless of scale— carries the risk of higher retail prices and supply disruptions, with potential consequences for medicine availability across the country.
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Written and edited by Shafaq News staff.
