Iraq-KRG salary row escalates: Baghdad cites revenue holdout
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, it confirmed, with funding secured independently of both oil and non-oil revenue borrowing.
Jamal Kocher, a member of the parliamentary finance committee, questioned with Shafaq News the timing and suitability of the ministry's decision, warning that more than 1.2 million public employees in the Kurdistan Region would be directly affected.
In response, 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''.
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.
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