Iraq: the new line-by-line customs tariff remains contested before Parliament
Applied since early 2026 under Cabinet Decision No. 957, approved in late October 2025, the replacement of the old flat fees with a line-by-line ad valorem calculation of the Iraqi customs tariff is still, in 2026, the subject of a legal challenge brought by MPs and traders.
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Since early 2026, Iraq has applied a new customs regime arising from Cabinet Decision No. 957, approved in late October 2025, which replaces the former flat-fee system with an ad valorem calculation based on Harmonised System codes, line by line. Observed rates range from 0.5% to 5% for essential foodstuffs, 0.5% to 2% for industrial raw materials, 10% to 15% for household appliances and domestic goods, 20% to 30% for luxury items, and 8% to 15% for vehicles depending on engine size and year of manufacture; tobacco and alcohol remain subject to significantly higher duties.
The legality of this reform is being challenged: Iraqi MPs are circulating a petition to have the decision overturned, arguing it breaches Article 28 of the Iraqi Constitution, under which no tax or duty may be introduced or changed other than by an act of Parliament. The government, for its part, presents the measure as stronger enforcement of the existing customs tariff, rather than the creation of a new tax.
On the ground, traders have left cargo waiting at ports and border crossings rather than clear it under the new tariff, and protests have taken place in several provinces, notably Baghdad and Dohuk. No judicial or parliamentary ruling settling the dispute has been identified to date.
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For an importer clearing Chinese goods in Iraq, particularly household appliances, vehicles or spare parts, the nature of the duty calculation has changed: it is now done line by line according to the HS code, rather than as a flat fee, which can significantly increase the bill on certain categories. The legal uncertainty surrounding the reform adds a risk of hold-ups at the border or retroactive recalculation: Sorva recommends that clients budget for the least favourable tariff and follow developments on this matter with their local freight forwarder before committing to any significant volume.
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