Fiscal Year 2026
Capacity Development Activities
Central Bank Operations
Central Bank Liquidity Monitoring
In October, METAC remotely supported the establishment of a daily central bank liquidity monitoring process. This included hands-on support for the conversion matrix between the accounting balance sheet to analytical balance sheet and ultimately the autonomous factors representation of the daily liquidity table. The results will be used directly for the liquidity forecasting mission planned for the second half of FY26. This mission is part of a project aimed at achieving effective domestic liquidity management under an exchange rate peg.
Financial Supervision and Regulation
SRP Project: ICAAP regulation and risk matrix development (May 24-28)
METAC collaborated with the Central Bank of Iraq (CBI) team to finalize new guidelines about the Internal Capital Adequacy Assessment Process (ICAAP) regulation, a critical component in sustaining the financial soundness of the banking sector. This initiative was part of a broader effort to enhance the banking supervision practices of the CBI. Emphasis was placed on improving the evaluation of risks and effective monitoring of banks, both off-site and on-site. The overarching objective is to ensure banks are better equipped to manage their financial risks.
Public Debt Management
Strengthening debt portfolio management capacity (June 15-19)
A virtual mission trained debt managers on the best practices in public debt management and financial analysis of public debt portfolios and debt instruments. The training focused on presenting financial mathematic concepts commonly used in public debt management, presented issues related to debt portfolio risk management, discussed the relationship between debt portfolio risk management and debt management strategy and covered some issues related to domestic debt market development, i.e., essential characteristics of government securities, auction methods, key players, and prerequisites for developing the government securities market.
Developing the Domestic Market for Government Securities
In September, METAC assisted the Ministry of Finance and the Central Bank of Iraq in assessing current practices and frameworks of the domestic government securities market and supported the authorities in drafting an action plan for further development. The recommended reform plan provides a medium-term framework for market development. METAC will continue to offer support for the implementation of the approved reform plan to facilitate the establishment of an effective primary market, with issuance conducted through market-based mechanisms.
Public Financial Management
Treasury Single Account Implementation
This follow-up workshop in September on Treasury Single Account (TSA) implementation with the Ministry of Finance of Iraq included stakeholders from the Ministry of Finance, Central Bank of Iraq, and seven State-owned banks. The main objectives were to: (i) review progress made since the last TSA workshop; (ii) update the TSA roadmap, and (iii) update the TSA concept note. Participants discussed the progress of the bank account inventory, the roll-out of the core-banking system in state-owned banks, the TSA design options and coverage, review of the draft TSA concept note, coordination and procedural arrangements for banking services, cashflow forecasting, and training for spending units. The authorities requested a follow-up workshop in early 2026 to include regional peer-learning component and share experiences in implementing TSA reform.
Revenue Administration
Thematic support for Iraq customs continues (July)
The sixth in a series of hybrid capacity development workshops commenced with remote drafting of supporting instructions for the implementation of customs guarantees. The draft has been shared with Iraq customs for their initial review and will be validated and finalized during an in-person workshop in August.
Strengthening Audit Capacity in Iraq’s Tax Administration (July)
The mission supported the General Commission for Taxes (GCT) in Iraq through a five-day training program designed to enhance the audit capabilities of approximately twenty tax officers. The mission built foundational knowledge and practical skills in auditing companies for compliance with Iraqi tax laws. Through interactive sessions and practical exercises, the mission team introduced participants to key audit principles, including case selection, planning, evidence gathering, and audit finalization. The training was based on good international practices such as VITARA and TADAT and tailored to address the diverse experience levels of participants. The training helps adopting modern audit techniques and strengthening the overall effectiveness of Iraq’s tax administration.
Enhancing Audit Practices
In October, METAC supported the General Commission for Taxes (GCT) in developing a comprehensive draft tax audit manual to ensure consistency, transparency, and quality in tax audits, supporting the GCT’s modernization efforts and the effective implementation of the SA system. The manual details the audit case selection process, the various types of audits and highlights the importance of respecting taxpayers’ rights, maintaining segregation of duties, and thoroughly documenting each step of the audit process.
Building Risk Management Capacity
A four-day interactive workshop in Jordan brought together tax officials from Iraq and Libya to introduce the foundational principles and strategic importance of the Compliance Risk Management (CRM) framework. Fourteen participants engaged in practical exercises and group work, applying CRM concepts to real-world scenarios and learning to identify, assess, and prioritize compliance risks using international good practices such as VITARA and TADAT.
Tax Policy
Income Tax Law (June 19-July 25)
A remote joint METAC and IMF HQ mission reviewed the draft Income Tax Law (ITL) before submission to parliament. The mission recommended legislative changes and policy design options to strengthen revenue yields, equity, and the efficiency of Iraq’s income tax legislation. The mission worked primarily with the General Commission for Taxation and the Supreme Committee for the Implementation of Tax Reform.
