In what is widely interpreted as a response to the Kurdistan Regional Government’s recent unilateral signing of energy contracts in the United States without consulting the Iraqi federal government, the Iraqi Ministry of Finance has notified the KRG’s representative in Baghdad that it has fulfilled its obligation to provide salaries for KRG public employees. The ministry stated that over the three-year period of 2023-2025, it has covered 12.75% of the allocated budget for each year, accounting for both direct payments from Baghdad and the oil and non-oil revenues the KRG has generated from its independent oil sales.

The directive includes detailed revenue data for the Kurdistan Region based on federal financial audit findings:

On May 28, 2025, the Iraqi Ministry of Finance issued document number 14502, informing the KRG representative to the Iraqi Council of Ministers that regarding KRG employee salaries for May 2025, the Kurdistan Region has exceeded its allocated budget share of 12.7%, which amounts to 13.547 trillion dinars from total actual expenditures under Federal Budget Law No. 13 for the years 2023-2025.

Consequently, in accordance with Federal Supreme Court decision No. 4/Federal/2025/203, the Ministry of Finance is legally prohibited from continuing salary disbursements to regional employees, particularly given that the Regional Government has failed to implement required reductions in regional employee compensation.

The following financial breakdown is based on the Federal Financial Supervision Bureau’s report:

Kurdistan Region Oil Revenues (2023-2024)

While the Finance Ministry document does not specify the region’s oil revenues for 2025, it estimates total oil revenues for 2023-2024 at 9.415 trillion dinars. The breakdown shows oil revenue of 4.709 trillion dinars in 2023 and 4.706 trillion dinars in 2024.

Kurdistan Region Non-Oil Revenues (2023-2025)

The document reports total non-oil revenues for 2023-2025 at 10.523 trillion dinars, distributed as follows: 4.657 trillion dinars in 2023, 4.700 trillion dinars in 2024, and 1.166 trillion dinars in 2025.

Combined Oil and Non-Oil Revenues (2023-2025)

Total combined revenues for the Kurdistan Region during 2023-2025 reached 19.938 trillion dinars. The annual distribution includes 9.365 trillion dinars in 2023, 9.406 trillion dinars in 2024, and 1.166 trillion dinars in 2025 (noting that 2025 oil revenue data was not provided).

Revenue Transfers to Federal Government (2024-2025)

The Finance Ministry document reveals that while the Kurdistan Region transferred no revenues to Baghdad in 2023, it returned 598.515 billion dinars to the Federal Government during 2024-2025. This represents merely 3% of the total revenue the Regional Government collected through oil and non-oil sources during 2023-2025. Specifically, 399.169 billion dinars were transferred in 2024, and 199.346 billion dinars in 2025.

Revenues Retained by Kurdistan Region (2023-2025)

According to the Finance Ministry analysis, the Kurdistan Region retained 97% of its total oil and non-oil revenues during 2023-2025, amounting to 19.339 trillion dinars. The regional retention figures show 9.365 trillion dinars in 2023 (with no transfers to the federal government that year), 9.007 trillion dinars in 2024, and 966.780 billion dinars in 2025.