Iraqi parliament moves ahead on foreign oil tax

BAGHDAD (Reuters) - Iraq’s parliament held an initial discussion on Saturday of a bill that would impose a 35-percent income tax on foreign oil and gas firms working in Iraq, lawmakers said.

“Today we held a first reading of a draft to impose tax on foreign oil companies working in Iraq,” Haider al-Ebadi, head of parliament’s economic committee, said.

Ebadi and other lawmakers said the 35 percent tax on oil company income, if approved, would cover all types of oil and gas contracts -- exploration, production, processing and other activities.

Details of the proposed tax were not immediately available.

Iraq, which has the world’s third biggest oil reserves but needs foreign cash to modernize its struggling industry, has been courting top global firms to develop oil and gas fields.

The Oil Ministry is scheduled to hold its second major energy auction this year in December, when it will offer up 10 major oilfields for bids from 45 qualified firms.

The tax bill will require a second reading in parliament before it can go to a vote, but lawmakers are not expected to vote on the measure before the holiday marking the end of the Muslim holy month, Ramadan, later this month.

Ali Hussein Balou, a Kurdish lawmaker who heads parliament’s oil and gas committee, said he did not expect opposition to the bill, which he said would be passed ‘smoothly’.

“The law will give Iraq major, significant revenue. I don’t expect anyone to resist this law,” said Amera al-Baldawi, a Shi’ite Arab lawmaker who sits on the economic committee.

Reporting by Waleed Ibrahim; writing by Missy Ryan; Editing by Andy Bruce