In 2024, Iraq’s tax revenue reached 7.68 trillion dinars, its highest level in two decades, yet this figure represents just 5.2% of total government income — highlighting the nation’s continued dependence on oil exports.

While the 2024 figure marks a significant milestone, it falls short of the 2017 peak when tax revenues constituted 8.14% of government income. That year stands as a watershed moment in Iraq’s fiscal history, combining robust absolute revenue (6.3 trillion dinars) with the highest relative contribution to state coffers.

The data reveals a fiscal landscape characterized by extreme volatility. Tax collections expanded 238% in 2009 only to contract 54% the following year. This pattern of dramatic swings persisted throughout the period, revealing a tax system highly vulnerable to political instability, security challenges, and oil price fluctuations.

Since 2004, when tax revenue stood at just 159.6 billion dinars (0.48% of government income), Iraq has made substantial progress. The nearly 4,711% nominal increase over twenty years reflects both economic growth and improved collection capacity. However, the tenfold increase in tax revenue as a percentage of total government income suggests other revenue streams — predominantly oil — have expanded almost as rapidly.

The post-2022 recovery appears more robust than previous growth cycles. After declining to 3.9 trillion dinars in 2022, tax revenue surged 51% in 2023 and another 30% in 2024. This acceleration suggests potentially improved institutional capacity following years of reforms.

The data reveals three distinct recovery periods (2009-2013, 2015-2017, and 2020-2024), with each rebound proving stronger than the last. This resilience, particularly following the dual shocks of political instability and the COVID-19 pandemic, indicates structural improvements in Iraq’s fiscal administration.

Despite these gains, Iraq’s tax system remains underdeveloped relative to its economic potential. Sustainable diversification away from oil dependency will require not just increasing tax collection but stabilizing it across economic cycles.