KRG Employee Salaries Dependent on Oil Exports, Revenue Transfers, and Salary Nationalisation

Economy 04:13 PM - 2025-07-28

Stacks of 50,000 bills of Iraqi dinars.

The resumption of oil exports from the Kurdistan Region remains a central condition for the continued disbursement of public sector salaries, alongside the transfer of non-oil revenues to Baghdad and the completion of the Salary Nationalisation (Tawtin) process. Officials warn that any delay or disruption to these obligations could immediately affect the salary distribution process.

Oil Exports Key to Federal Support

Jamal Kochar, a member of the Finance Committee in the Iraqi Parliament, told PUKMEDIA: “According to the current understanding between the Kurdistan Regional Government (KRG) and Baghdad, the KRG must begin exporting oil via SOMO [Iraq's State Organization for Marketing of Oil]. Any hindrance to this process will negatively impact the federal government’s ability to disburse salaries.”

He noted that the situation remains fluid, with no confirmed date for the disbursement of July salaries.

“Negotiations between the two sides are ongoing and frequently changing. The payment of salaries depends on three factors: the resumption of oil exports, the nationalisation of KRG salaries, and the monthly transfer of 120 billion dinars in non-oil revenues to the federal government,” Kochar said.

He added: “If the KRG adheres to its commitments, we do not anticipate any issues with the July salary payments. However, it remains too early to determine an exact payment date.”

Security Concerns Undermine Oil Export Prospects

Energy expert Bahjat Ahmed expressed doubt that resuming oil exports would offer a quick or reliable solution to the salary issue.

“Despite the agreements in place and some initial implementation, the resumption of oil exports from the Region is currently not straightforward. The ongoing instability, particularly repeated drone attacks on oil infrastructure, makes the export process both difficult and time-consuming,” Ahmed told PUKMEDIA.

He warned that the security situation in the Kurdistan Region’s oil fields continues to obstruct meaningful progress on restoring full export operations.

July Agreement Outlined Conditions for Salary Transfers

On 17 July 2025, the Iraqi Federal Council of Ministers approved a new agreement with the KRG during an extraordinary session. Under the deal, salaries for May were disbursed in exchange for the KRG’s commitment to export 230,000 barrels of oil per day through SOMO, transfer 120 billion dinars per month in non-oil revenue, and expedite the process of nationalising (localising) salary payments for public employees.

While the agreement marked a major step forward in federal-regional cooperation, its implementation remains closely tied to the Region’s ability to ensure secure, consistent oil exports and meet its financial obligations to Baghdad.

Salary Nationalisation (Tawtin) in Iraq refers to the process of transferring public sector salary payments directly into employees' bank accounts through a unified, transparent system overseen by the federal government. It involves biometric registration and digitisation of payroll data to ensure salaries are paid to legitimate employees, prevent duplicate or ghost employees, and tighten fiscal control.

This system has been implemented across most federal ministries in Iraq and is seen as part of a broader effort to modernise public financial management, reduce corruption, and align payroll systems with global standards. The KRG has so far not completed the process.



PUKMEDIA