File - In this 2003 file photo, American Cpl. Gene Canon of Tampa Bay, Florida, mans a 50 caliber machine gun as security for a fuel tanker convoy on the road from Tikrit to Samara in Iraq.(AP Photo/Rob Griffith)
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American military contractors operating in Iraq are accusing Baghdad of employing strong-arm tactics to make them pay exorbitant income taxes, a practice they've warned the Trump administration is hampering the fight against Daesh (ISIS) militants.Najiha Abbas Habib, director-general of Iraq's tax authority, rejected the allegation U.S. contractors are being gouged. American companies working in Iraq are not exempt from taxation, she said, adding that Iraq's tax rates are actually lower than other Middle Eastern countries.David Berteau, president of the Professional Services Council, estimated in an AP interview that the Pentagon spent about $1 billion in just the last year on contracts with about 20 U.S. companies for support in Iraq.Berteau said the companies either seek reimbursement from the U.S. government for the taxes or build the expense into the price they charge on the contract.The command declined to provide a list of the U.S. companies in Iraq with Defense Department contracts.Sen. John Cornyn of Texas, the Senate's No. 2 Republican, has thrown his support to the U.S. companies, telling Tillerson and Defense Secretary Jim Mattis that he's concerned the income tax demands could lead American contractors to avoid Iraq altogether.
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