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Iraqi News Saturday AM 1-9-21

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Parliamentary Finance Decision: All Items In The 2021 Budget Are Subject To Change

Saturday 09 January 2021   98   Baghdad: Morning   Today, Saturday, the House of Representatives will hold a session devoted to completing the first reading of the draft federal budget bill for the current fiscal year 2021, and the reporter of the Parliamentary Finance Committee, Ahmed Al-Saffar, confirmed that “all budget articles are subject to change because they conflict with the government program” and the supposed reforms.

Al-Saffar said, in an exclusive interview with Al-Sabah, that “if the session took place today, Saturday, the budget will be read first, and there will be a session on Monday or Tuesday for the second reading, after which the Finance Committee will receive the project, and begin to discuss all of what was mentioned in the draft 2021 budget.” Pointing out that “all the budget items are subject to change, because they are not consistent with the government program, the ministerial curriculum, and the white paper presented by the Ministry of Finance.”

He added that “the first major axis of the five axes in the white paper presented by the government focuses on rationalizing expenditures and increasing revenues, as we noted in this budget that it is one of the largest budgets in Iraq since 2004, and it is an explosive expansion budget, so most of the spending items have become It includes expansion rather than rationalization, and this contradicts the main theme in the white paper. ”

Al-Saffar emphasized that “the budget targets the poor and middle classes and employees with middle or lower salaries, since the decision to change the exchange rate of the dinar against the dollar led to an inflation of 25 percent, and this means a decrease in the real income of employees by this amount, and 25 percent of the income began to erode due to inflation.” And high prices, “noting that” this class is the most affected by this budget, noting that the white paper says that (the government’s direction is to support and encourage the vulnerable and low-income classes). ”

The reporter of the Finance Committee criticized what he described as the legal error in which the government made the issue of taxes, and said: “The government, instead of going to the waste in collecting and collecting revenues, went and made a mistake in including a legal change in the income tax rate in the draft budget that is (Temporary) laws that are valid for a year only, while tax laws are (permanent) laws that are generally applied for the purpose of amending and repealing laws, ”indicating that“ if the government wants to change or amend the tax law, it is supposed to submit a draft (the tax amendment law) or The articles included in the tax law, and not to include a progressive scale with the tax deduction for employees within the budget law, which is a (temporary) law, meaning that the government made changes to a (permanent) law within a (temporary) law.

The other important point that Al-Saffar made in his speech to Al-Sabah is that “the salaries of the retired are trusts with the government that were deducted during their work period, and thus a previous tax was deducted from them, and by imposing the tax on them again, we will be facing a case of double taxation, and this is not permissible.” .

The reporter of the Parliamentary Finance Committee stated, “If the government is about to compensate these classes with social care and the ration card, then this matter will not achieve the goal, because the ration card contains a large part of corruption because the basket does not reach the citizen as well as its quality, and if it aims to increase Social security and social care cannot cover all the poor, so compensation for the damage caused by inflation through social welfare and the ration card is difficult to achieve in reality.

With regard to changing the exchange rate of the dollar, Al-Saffar asserted that “there is interference in the independence of the Central Bank, and Parliament has no right to interfere in changing the exchange rate as it is the bank’s affair, but there is a parliamentary movement to question some ministers, including the Minister of Finance and the Governor of the Central Bank.” His speech that “the budget articles will be discussed in detail, and the Finance Committee will present alternative proposals for each article, and it is not our authority to change those articles, and the House of Representatives is the one who decides to vote on the budget.”

In turn, the legal expert, Ali Al-Tamimi, affirmed that “if the parliament legislates and votes on the budget law with its violations, it will be subject to appeal before the Federal Supreme Court in accordance with the constitutional article 93, as this contravenes Article 30 of the Constitution and Articles 23 and 26 of the Charter of the International Covenant, and approved Article 62 of the Constitution, when the draft budget is received, Parliament must transfer between chapters and chapters, as well as reduce the total amounts, and it may return it to the Council of Ministers when necessary and propose an increase in the total expenditures.

On the extension of the current legislative term to Parliament, Al-Tamimi explained, “Article 57 of the constitution requires that the budget law be enacted even if the legislative term ends,” indicating that “Parliament cannot reduce the exchange rate of the dollar that was set in the budget, but rather it can, ie Parliament, He proposes and returns the budget to the Council of Ministers due to the absolute necessity for that, and as it contravenes Article 30 of the Constitution, which requires the government to provide decent living for the people.

On Friday, the Ministry of Finance issued a statement on supportive measures to increase the positive effects of a rate adjustment Exchange.

The statement stated that “the Ministry of Finance has led extensive discussions in the past weeks after the approval of the budget by the Council of Ministers regarding the follow-up to adjusting the exchange rate with many parties inside and outside the government, and these discussions will culminate next week with a proposed expanded meeting with the main economic actors from the public and private sectors.” “The Ministry of Finance hopes that these measures will coincide with discussions within the House of Representatives on the budget.”   LINK

Finance: Supportive Measures To Adjust The Exchange Rate

Saturday 09 January 2021   55  Baghdad: Morning  Yesterday, Friday, the Ministry of Finance issued a statement regarding the measures supportive of increasing the positive effects of adjusting the exchange rate, at a time when this price reached 144 thousand and 750 dinars per hundred dollars in the currency markets across all governorates of Iraq. Absolutely that there are a number of supportive measures

that must be taken to increase the positive effects of adjusting the exchange rate, ”explaining that“ the Ministry of Finance was unable to do so, publicly, due to the sensitivity of the issue, and because the budget must be approved, first by the Council of Ministers. ”

The central bank decided late last year to amend the exchange rate of the dollar in the Ministry of Finance to 1450 dinars per US dollar, as the price of buying foreign currency from the ministry, and 1460 dinars per dollar, the price of selling foreign currency to banks, and 1470 dinars per dollar the price of selling foreign currency to the public, stressing At the time, the devaluation of the dinar will be one-time only and will not be repeated, and he will defend this price and its stability with the support of its foreign reserves, which are still at solid levels that enable him to do so.

The statement added that “the Ministry of Finance has led extensive discussions in the past weeks after the approval of the budget by the Council of Ministers regarding the follow-up to adjusting the exchange rate, with several parties inside and outside the government, and these discussions will culminate next week with a proposed expanded meeting with the main economic actors from the public and private sectors.” Until “the ministry will develop its detailed policy program designed to maximize the benefits from adjusting the exchange rate.

He added that “the Ministry of Finance hopes that these procedures will coincide with discussions within the House of Representatives regarding the budget,” and pointed out that “the main policy measures to protect the poor and the vulnerable have been included in the budget and discussed in the minister’s statement regarding the budget. Budget ”.     LINK

Included In The Draft Budget Law 2021..Credit Rating Of Iraqi Insurance Companies

Saturday 09 January 2021  55   Baghdad: Mustafa Al-Hashemi

The issue of classification of insurance companies was mentioned in the draft budget law 2021, but it did not differentiate between public insurance companies and private insurance companies. According to a specialist in insurance affairs, resorting to classification “will reveal the fragility of the financial resources of many insurance companies and the weakness of their financial solvency and their ability to face large compensation claims.” At the same time, calling on the Insurance Bureau to “issue binding instructions for insurance companies to obtain classification from specialized bodies in this field.”

The specialist, Misbah Kamal, said in an interview with Al-Sabah that “Many private insurance companies, which the bill described as (shops), are not in a financial position and in good management that would facilitate them to obtain an acceptable credit rating; Assuming that these companies will seek to obtain the classification, ”calling on the Insurance Bureau to“ issue binding instructions for insurance companies to obtain the classification from the bodies specialized in this field, since the Bureau’s initiative in this regard will improve its position in the Iraqi insurance market. ”

He added, “Most of the private insurance companies, in my estimation, and because they (shops) as described in the 2021 budget bill, will hesitate to agree to the classification, due to their conviction of their weak financial resources, underwriting capabilities, and good management. Or unwillingness to bear the costs of classification ”.

Credit rating

Iraq obtained its first credit rating in its history in 2015, and the rating was “B-” issued by the American rating agency Standard & Poor’s (S&P). Some viewed the degree of this classification with satisfaction, and the classification reflected the reality that oil production sites were not under the control of terrorists, the government’s continuing efforts to control the state budget, and the country not ceasing to pay its debts.

re Insurance

Kamal added, “The reinsurance brokers of the Iraqi Reinsurance Company, after entering the Iraqi insurance market in 2005, had a role in spreading the value of the classification of global reinsurance companies that provide reinsurance agreements for Iraqi reinsurance and Iraqi insurance companies, public and private, that benefit from the protection of these agreements.” .

And between «when the degree of classification is negative, this classification sends a signal of distrust to the insured, assuming their interest in the classification of insurance companies, and international reinsurance companies that provide reinsurance agreements for Iraqi return, and the same applies to Iraqi repatriation, which has not received a classification so far.

Kamal said: As far as I know, “the failure to classify the Iraqi return and the public and private insurance companies did not play a role in providing return agreements for them. The main factor was the volume of written insurance premiums (low) and the deterioration of the loss experience (the occurrence of large losses in certain branches of insurance) and the underwriting capabilities. (Weak). As a result, the limits of the reinsurance facilities provided by international reinsurance companies are low, and the other conditions of reinsurance agreements are not as flexible as they were before 2003.

Assembly and Diwan

Kamal asserted, “There is no mention in the Iraqi Insurance Society’s statute for the year 2005 of the classification subject in its objectives and tasks,” indicating that “the association can encourage insurance companies to obtain a classification for them from accredited classification companies, and they can play a role in spreading the appropriate culture of classification Insurance companies.

And he continued, “Regarding the Insurance Bureau, the classification is not explicitly mentioned in the chapter on the Insurance Bureau in the Insurance Business Regulation Law of 2005, but Article 6 of it outlines a goal for the Bureau to“ organize and supervise the insurance sector in a way that ensures its development, securing an open, transparent and financially secure market, and strengthening The role of the insurance industry in insuring people and property against risks to protect the national economy and to collect, develop and invest national savings to support economic development.

Classification Bodies

The rating agencies that studied the creditworthiness of Iraq took into consideration a number of factors, including, for example, reducing spending on public sector employees (salaries and wages), financing the deficit of sector establishments, the role of the central bank in monetary financing of the deficit, the impact of growing imports, and diversifying the economy. To reduce dependence on oil revenues and other things, that is, financial and economic analysis of data and policies, the White Paper (October 2020) and the reforms it adopted, which are subject to discussion, came to ensure internal and external borrowing (especially the International Monetary Fund).

Kamal concluded, saying: “As far as we know, these bodies did not take into account the contribution of insurance activity in their classification of Iraq, and we believe that the Iraqi Insurance Association studies the contribution of this activity to the gross domestic product, and the reasons that prevented and prevented from achieving a boom in the volume of total written insurance premiums.” Adding, “If its internal resources do not allow for this study, it can seek the help of specialists inside Iraq, including academics.”  LINK

The High Exchange Rates Of The Dollar In The Local Market Today

Time: 01/09/2021 10:47:45 Read: 12,779 times  {Baghdad: Al Furat News} The exchange rates of the dollar recorded a rise in the main stock exchange and local markets for today, Saturday.

In the Kifah Stock Exchange in the capital, Baghdad, the selling price reached 144,500 dinars for each $ 100 bill, while the purchase price was 143,500 dinars for each $ 100 bill. ”

The exchange rates in the local markets witnessed a rise as the selling price of the dollar reached 144,000 thousand dinars for each paper category $ 100.

The purchase price of the dollar in the local markets scored 142,000 thousand dinars, compared to each sheet category $ 100.     LINK

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