Iraq launches Domestic Revenue Mobilisation Strategy with support from the European Union and Germany

The Government of Iraq has launched its Domestic Revenue Mobilisation (DRM) Strategic Reform Plan, marking a milestone in the country’s economic reform efforts. The strategy aims to strengthen financial stability, reduce Iraq’s reliance on oil revenue, and create new opportunities for investment in essential public services, such as education, health and infrastructure. In his opening remarks, Prime Minister Mohammed Shia' Al-Sudani underscored the central role of tax reform in the broader economic agenda: “Tax reform is a part of the wider economic reform and remains a priority in the Government’s agenda. It is important to increase the non-oil tax base without compromising the investment attractiveness of our economy,” he stated.

For decades, Iraq’s economy has depended almost entirely on oil revenue. Today, oil still accounts for around 99% of Iraq’s exports, 85% of the federal budget and more than 40% of the country’s Gross Domestic Production (GDP). While oil remains an important resource, this strong dependency makes Iraq vulnerable to fluctuations in global prices. The DRM Strategy sets out a clear and structured roadmap to diversify revenues, expand income sources, and build a stronger, more resilient economy.

The plan brings together reforms in tax policy, legislation and administration. It also aims to improve compliance, modernise digital systems, strengthen coordination between institutions and enhance trust of citizens. Together, these measures are designed to make Iraq’s non-oil revenue system fairer, more transparent and more effective. Highlighting the legislative efforts behind the strategy, Iraq’s Finance Minister, HE Taif Sami Mohammed, explained: “We worked hard on improving the tax legislation that caters towards fiscal transparency and social justice. The Domestic Revenue Mobilization Strategic Reform Plan is a crucial tool to expedite reforms drawn on international standards and best practices.”

The strategy was led by the Prime Minister’s Office and the Ministry of Finance, in coordination with the Supreme Committee for Tax Reform and contributions from Parliament’s Finance Committee, the General Commission for Taxes, the Iraq Customs Authority and other institutions. The DRM strategy reflects Iraq’s broader reform agenda and draws on international best practices. Importantly, it also serves as an open invitation to the international community to support and contribute to the priority areas outlined in its activity plan, ensuring effective implementation and long-term sustainability.

Jonne Bruecher, Acting Country Director at GIZ Iraq, highlighted the immediate potential of the reforms: “The quick wins of the domestic resource mobilisation reform can be expected from reform steps within the current sets of laws and regulations that are independent of larger reforms that may take years to be finalised. In Iraq, we see a great potential in strengthening customs revenue collection, updating the tax compliance framework, and improving enforcement of existing tax laws.”

The development and implementation of the Domestic Revenue Mobilisation Strategy is supported by the Strengthening Public Finances and Financial Markets project, which is part of the Team Europe Initiative in Iraq (#TAEUFIQ). The project is implemented by GIZ and funded by the European Union and Federal Republic of Germany. Through the FFM project, GIZ supports transparent and accountable financial institutions, focusing on non-oil revenue mobilisation, public financial management reform, protection of public assets and improved access to finance for small and medium-sized enterprises.