Notification from Zain Iraq Regarding Sales Tax

Zain Iraq would like to announce that it had received the Iraqi Government resolution regarding the 20% sales tax application on recharge cards as an increase of the RCs price of all denominations. This resolution, so to say, is rather committing and the government had put it in implementation after the consent of the Iraqi Parliament effective August 1, 2015.

Article 33 of the Federal General Budget Law No. 2 of 2015, ratified end of January this year and its regulations No. 5 on 4.5.2015 stipulate the application of 20% sales tax on pre-paid RCs and post-paid bills. In this regard, our company would like to explain to all our subscribers that the application of this law would not generate any benefit to the company; on the contrary, it will impact its sales and revenues. And the role of our company is restricted to collecting and delivering the tax to the Ministry of Finance through the State Tax Authority.

Worth saying that mobile operators had remitted the license fee amounting to $ 1.25 billion each in addition to $ 307 million as 3G launch charges and also 15-18% revenue share to the CMC in addition to all other taxes applied by the govt. authorities.

The new regulations No. 5 of Article 3 (1st) stipulates that “ provider (mobile operators) is to add the tax amount to the mobile and internet pre and postpaid service price and this is to be revealed to the consumer”. Also “the tax amount” according to (2nd) “ is to be paid each 3 months annexed with a certified report from a specialized accountant to explain the provider’s activities according to the format prepared by the State Tax Authority to this effect”.

Our company accordingly received the Finance Ministry regulations No. 5 of 2015 as a requisite to apply this part of the law all over Iraq. And while we abide by the rulings of this law, we consider with great respect the consent of our customers and we adopt the highest international standards to serve them.