National Intelligence Daily
Friday
3
IRAQ: Mora Authority Measure*
Baghdad is rasing taxes ana demanding additional sacrifices from an already war-weary population as it struggles to finance me conflict and moet minimum domestic needs, f
Tha government has raised the Income tax toercent, nearlyIncrease over the tax rati
al*o ampaign lo collect "voluntary" contributions ol gold from Iraqi women In order lo demonstrate public support lor Ihe war effort. In addillon. the regime has cut educational stipends and elementary school food programs.
To reduce outlays ot foreign excnsrvge. Baghdad nas delayed the Issuonce ot import licenses for many nonesseniial consumer goods, itas stashed imports ol raw materials by two-thirds for private sector Industries, which pioduco domesiic consumer goods. Q
Commsnf: Increased Income loxes and gold conlrlbulions will add to popular discontent without coming close to meeiing Iraq's loroign exchange needs. Oil earnings this year will reach onlyillion, as compared with abouiillion last yearillionesult. Iraq is likely to be lelturrent account delicti5 billion, even aher substantial cuts in imports
Direct aid by Persian Gull slates and oil sales by them on4 billion in additionalnot close the gap. With foreign exchange reserves ol less lhanillion. Iraq will have to defer al leasiillion in payments owed this year.
Original document.
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