TEHRAN– According to the budget bill for the next Iranian calendar year (March 2016-March 2017), tax incomes are projected to rise by 14 percent from the last year’s 880 trillion rials (about $24 billion) to one quadrillion rials (about $27 billion), said Iran's Management and Planning Organization Director Mohammad Baqer Nobakht.

Nobakht said, “To reduce our reliance on oil revenues, we need to increase government’s tax incomes,” the Islamic Republic of Iran Broadcasting (IRIB) reported on Monday.

Tax incomes, he said, includes the revenues earned from direct tax, value added tax (VAT) and customs duties.

Iranian President Hassan Rouhani’s economic strategy is to significantly reduce the government’s dependency on oil and instead collect tax more systematically, Ali Kardor, the deputy managing director of the National Iranian Oil Company said on October 2015.  

“For the first time in 50 years, the government’s share of the oil revenue is less than what it is earning from tax, including VAT,” Kardor said. “Only around 10% of Iran’s GDP is currently dependent on oil.” 

Meanwhile, Iranian Finance and Economic Affairs Minister Ali Tayyebnia has said Iran’s economy is heavily dependent on oil revenues; however, the government is determined to reduce dependence on oil through improving the tax system and the boosting of economic activities.  

*** Development budget hits $16 billion

Nobakht said, “Having sufficient financial resources is vital in reaching the five percent economic growth, predicted for the next year.”

To this end, he added, the next year’s budget sees the investment of as much as two quadrillion rials (about $54 billion) by government and state-owned companies, furthermore, 30 trillion rials (about $1 billion) worth of development projects would be assigned to the private sector.

The total development budget for the next year is placed at 600 trillion rials (about $16 billion) , a figure which stood at 500 trillion rials (about $13 billion) in the current Iranian calendar year (March 21, 2015-March 20, 2016).

According to the next year’s budget, Nobakht said, 480 trillion rials (about $13 billion) is allocated to the subsidies reform plan.

*** Inflation rate forecasted to fall to 11%, unemployment to single-digit

“Next year, the inflation rate is predicted to decline to 11 percent,” said Nobakht.

In October, Central Bank of Iran Governor Valiollah Seif said adoption of appropriate fiscal and monetary policies has helped Iran reduce inflation rate from 40 percent in 2013 to less than 15 percent in 2015.

Nobakht further stated, “We need to create jobs for around 900,000 people per annum.”

Referring to the sanctions being lifted against the Islamic Republic, the Iranian official said, “By the end of the implementation of the Joint Comprehensive Plan of Action (JCPOA), the unemployment rate is planned to lower to a single digit number around 8 percent.”

According to Nobakht, the government owes as much as 640 billion rials (about $17 million) to the banking system.

He further noted that $4.5 billion of Iran’s unfrozen assets belongs to the government who plans to spend most of it on paying its debts.

SJ/MA/