Prime Minister Haider al-Abadi confirmed that there are more than 50,000 ghost soldiers listed under the country's military force, according to VOA News.
These soldiers, who are included in the military's payroll list, do not actually serve the country but are given compensation.
The discovery was made after Abadi launched an investigation in an effort to eliminate corruption from Iraq's institutions.
According to an official of the security forces, some of the names of the "fadhaiyin" or ghost soldiers are made up. The salaries issued to these names are then redirected to high-ranking military officials.
Others names are from actual persons who are not really part of the military. A portion of their salaries are also given to the commanders.
"There are two kinds of 'fadhaiyin,'" he told the AFP via Daily Mail. "The first kind: Each officer is allowed for example, five guards. He'll keep two, send three home and pocket their salary or an agreed percentage."
"Then the second and bigger group is at the brigade level," he added. "A brigade commander usually has 30, 40 or more soldiers who stay at home or don't exist."
The officer noted that the practice of employing ghost soldiers has prompted a chain of corruption within the military.
"The problem is that he too, to keep his job as a brigade commander, has to bribe his own hierarchical superiors with huge amounts of money," he explained.
Former Iraqi lawmaker Othman al-Khalidi said that the prevalence of ghost soldiers is one of the reasons behind the weakness of the country's military force, Al-Monitor reported.
In early 2000, Iraq's army had 400,000 soldiers. However, the recent inquiry revealed that it only has 170,000 active-serving soldiers.The low number of soldiers forced the government to turn to militias to bulk up its military force.
"Ghost in the army's ranks, who get paid for staying at home," Khalidi told Al-Monitor. "This pushed competent authorities to resort to armed militias to fill the gap within an army that failed to defend its country."
Khalidi said a major reform must be conducted on the military force to eliminate ghost soldiers.