Coalition Provisional Authority

Thursday, April 1, 2004 Contact: Sam Whitfield

Iraqi Customs Service and Reconstruction Levy Introduced

Baghdad, Iraq On April 1, 2004, CPA Order 54 creates an Iraqi Customs service and introduces a five percent reconstruction levy on most goods imported into Iraq that will be deferred until April 15. The implementation of a reconstruction levy will take Iraq one step closer towards independence and self-governance, by putting in place another source of revenue that is not reliant on the sale of oil.

The reconstruction levy is designed to be fair and transparent, managed by the newly-formed Iraqi Customs Service. A modern computer system will record data on goods imported into the country shipped by plane, train, ship or truck. Revenue generated by the levy will be collected by the Iraqi Ministry of Interior, Customs Service on behalf of the Ministry of Finance and deposited in the general fund to be used for the betterment of the Iraqi people. Under the former regime, waiting times for goods to be cleared could run as long as 4 15 days. With the new systems employed by the Iraqi Customs Service, waiting times should be reduced to no longer than 24 hours, and a standard fee will be instituted throughout the country. Ministry of Interior personnel and the Iraqi Customs Service are distributing pamphlets notifying importers of the levy.

The Iraqi Customs Service is currently registering companies which will allow them to pay the levy on a monthly basis. Importers choosing not to register for payment on a monthly basis will be charged at border crossings before entering the country.

Certain goods and organizations will be exempt from the reconstruction levy that are deemed vital to the reconstruction effort. Exempted goods include food, medicines, medical equipment, books, clothing, and goods imported for humanitarian assistance. Organizations involved in the reconstruction of Iraq, such as foreign governments, not-for-profits, contractors, sub-contractors and international organizations will be exempt. Iraqis and persons from other countries entering the country with goods valued under 500,000 Iraqi Dinars (intended for personal use and not for sale), will also be exempt.

Detailed information on this levy may be obtained from the Iraqi Customs Service or from the CPA web site at  An Importers Guide is available at border crossings.

# # #