"العراق والخليج الفارسي" [ظ‎‎٣‎١‎١] (٨٦٢/٦٢٥)

484 CURRENCY, FINANCE, COMMERCE, AND OIL
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even exceeded the latter figure. When rent or land tax payable to
the State was added, the total sum payable sometimes exceeded 40
per cent. The system was radically revised in 1931 by the adoption
of the istihlak or consumption tax. By this Act a tax on produce at
market or for export was substituted for assessment at harvest or
at the threshing-floor, and that part of the produce consumed by the
cultivator and his family was freed from tax. This reform swept
away the old complicated system, brought relief to the small agri
cultural taxpayer, and to the revenue officials, without seriously
affecting the State revenue. This tax on produce sold is now the
only charge on cultivators, excepting rents for land and water for
irrigation, which are not taxation in the strict sense. Although the
yield from agricultural taxation has remained fairly stable, its pro
portion to other taxes has fallen. In 1923 agriculture brought in
30 per cent, of the revenue from taxation; ten years later it was 18
per cent.; in 1938/9 only 11 per cent. The fall is, however, partly
attributable to the fall in price of agricultural produce.
These taxes on agricultural produce are thus a form of excise.
Similar duties are imposed on fish at marketing centres, and on
animals, but methods of assessment are not yet uniform, and, as with
agricultural produce, there are considerable loopholes for evasion.
Income tax was introduced in 1927; it is not a satisfactory source
of revenue. The very small section of the population with fixed
salaries pays the tax in full; merchants, shopkeepers, professional
men, and even landowners evade a large part of their dues. Many
are too uneducated to keep accurate accounts; merchants often keep
their accounts only in their heads. Even without intentional evasion
it is often impossible to make accurate assessment, and in practice
the full tax is paid by very few except State officials and foreigners.
The following table gives the gross revenue in dinars derived from
income tax in selected years:
1928/9 . . 28,500 1937/8 • • 287,561
1931/2 • • 104,400 1938/9 • •
1935/6 • • 248,613 1939/40 • • 370,013
Expenditure
There is little that calls for summary comment in details of
expenditure. The largest recurring items during the period 1934/5
to 1939/40 were defence (26%) and police (13%), which are perhaps
surprisingly low, but are accounted for by the fact that the defence
of Iraq is really a strategic obligation of Britain. Expenditure on
education amounted to 11 per cent, over the same period, but was