The Kurdistan Regional Government's (KRG) Ministry of Finance and Economy has strongly rejected calls to halt federal financial transfers to the Kurdistan Region, insisting that the regional government has complied with all legal and financial obligations under Iraqi law.

In a detailed statement issued on Tuesday, the Directorate General of Accounting responded to remarks by the First Deputy Speaker of the Iraqi Parliament, Adnan Fayhan al-Dulaimi, who had called for suspending federal funding to the Kurdistan Region until disputed fiscal accounts between Baghdad and Erbil are fully resolved.

The ministry stated that the Kurdistan Region has consistently fulfilled its obligations under Iraq’s Federal Financial Management Law No. 6 of 2019 and the Federal Budget Laws for 2023, 2024, and 2025. It emphasized that the KRG has repeatedly expressed its willingness to address any outstanding financial observations or reconciliation issues through dialogue with federal authorities.

According to the statement, the KRG continued transferring the federal treasury’s share of non-oil revenues throughout 2025 in line with agreements reached with the previous federal government. In return, public sector salaries in the Kurdistan Region were funded for only ten months of the year, while allocations for November and December were not provided, despite salaries elsewhere in Iraq being fully financed.

The ministry added that the Kurdistan Region maintained transfers of the federal share of non-oil revenues during the first five months of 2026 under agreed mechanisms. However, it noted that revenues declined significantly in March and April due to wartime conditions in the region and delays in implementing the ASYCUDA customs modernization system at border crossings.

Officials argued that the delayed implementation of the customs system contributed to economic pressure on the Kurdistan Region despite ongoing technical discussions between both sides. The ministry also pointed to a previous agreement allowing the transfer of 50 percent of non-oil revenues during periods of reduced income.

Rejecting proposals to suspend federal transfers, the ministry described such measures as legally and constitutionally questionable. It warned that withholding salaries or reducing financial entitlements for a specific segment of Iraqi citizens would undermine the principle of equality before the law and raise serious constitutional concerns.

The ministry called on political leaders and federal institutions to pursue constitutional and legal solutions to outstanding fiscal disputes, including issues related to what it described as arbitrary spending practices affecting the timely disbursement of the Kurdistan Region’s financial entitlements.

Reaffirming its commitment to cooperation with Baghdad, the KRG stressed the importance of continued dialogue to resolve financial disagreements within Iraq’s constitutional framework.