Iraqi Government Rocked by Largest Corruption Scandal Under Kadhimi’s Leadership
$2.5 Billion in Tax Revenues Embezzled from Iraq’s Accounts
The new government of Iraq is facing its first major challenge with the discovery of a massive tax evasion scheme, which has seen some $2.5 billion (€2.44 billion, 3.7 trillion Iraqi dinars) in tax revenues vanish from the country’s accounts. This scandal, which dates back to 2021, has been described as the biggest corruption case under the leadership of former Prime Minister Mustafa al-Kahdimi.
The Scheme: How it Worked
According to an internal audit by the Finance Ministry, five shell companies fraudulently received the embezzled funds from Iraq’s tax commission. The scheme involved:
- Fake documents
- Cash payments made via nearly 250 checks between September 2021 and August this year
- Lack of oversight in the refund process, making it difficult for auditors to follow the trail further
Arrests and Seizures
Iraqi authorities have already arrested Nour Zuhair Jassim, the CEO of two of the five companies, who received over $1 billion from the tax commission account. Two tax officials have also been taken into custody, and judicial authorities have seized several properties and millions in assets.
Concerns About Corruption and Accountability
The scandal has raised concerns about Iraq’s ability to tackle corruption and uphold transparency. The country ranked 157th out of 180 countries on Transparency International’s index for clean governance in 2021, and the embezzled funds amount to around 2.8% of the country’s 2021 state budget.
Prime Minister Mohammed Shia al-Sudani has vowed to crack down on corruption and ensure that those responsible are held accountable. The government is under pressure to demonstrate its commitment to transparency and good governance in the face of this massive scandal.
Challenges Ahead
Officials acknowledge that any prosecution of high-level figures involved in the scheme may be difficult due to Iraq’s political culture and the potential unrest it could cause. However, the government must take bold steps to address corruption and restore public trust if it is to move forward.
Key Takeaways
- $2.5 billion in tax revenues embezzled from Iraq’s accounts
- Scheme involved fake documents and cash payments via nearly 250 checks
- Five shell companies fraudulently received the embezzled funds
- Two arrests, several properties seized, and millions in assets frozen
- Concerns about corruption and accountability in Iraq
- Government under pressure to demonstrate commitment to transparency and good governance