Corruption, mismanagement and nepotism are rife in Iraq where they have caused widespread public anger.

Days after Prime Minister Mohammed Shia al-Sudani was appointed last month, authorities announced they were investigating the "theft" of $2.5 billion from the tax authority, with a hearing by a judge of five senior tax officials.

The high commission, whose creation the Commission of Integrity announced on Wednesday, will be specifically responsible for "investigating major cases of corruption" such as the tax authority case, said Judge Haider Hanoun, who will now head both bodies.

The new panel must "block corruption and punish those who are guilty of it", the commission said in a statement.

Official figures published in 2020 estimated that well over $400 billion had gone missing from state coffers since dictator Saddam Hussein was toppled in the US-led invasion of 2003.

Iraq ranks a lowly 157 out of 180 countries in Transparency International's corruption perceptions index.

Criminal charges are rare in Iraq and usually limited to mid-level government officials.

"Pervasive corruption is a major root cause of Iraqi dysfunctionality," UN envoy Jeanine Hennis-Plasschaert told the Security Council in early October.

"And frankly, no leader can claim to be shielded from it."