Iraq’s caretaker cabinet has reinstated a 20% tax on mobile phone and internet recharge cards as part of efforts to increase state revenues and reduce the budget deficit. The decision revives a levy first introduced in 2015 during a period of fiscal austerity and later cancelled in 2022.
Economic experts note that the tax falls under income tax regulations and is legally imposed on telecom companies, not consumers. However, concerns have been raised that operators may attempt to pass the cost on to subscribers through higher prices, a practice critics describe as unfair given the high costs and relatively weak quality of telecom services in the country.
Observers have also criticized the government’s reliance on consumer-facing taxes to address budget shortfalls, arguing that unpaid dues owed by telecom companies and excessive public sector spending should be addressed first. Lawmakers previously disclosed that telecom operators owe the state billions of dollars, funds that could significantly support public finances if recovered.
Despite these concerns, the government views the reinstated tax as part of a broader policy to strengthen non-oil revenues amid ongoing fiscal pressures.
