Confusion in Iran’s economy plans



Iranian Parliament is preparing a bill aimed to decrease taxes and social welfare charges of the producers by 10 percent and 15 percent respectively.
Currently, the share of taxes in Iran's GDP is about 7 percent.
On August 10, the State Tax Affairs Organization's director Ali Askari said that the current year's budget law has envisaged earning some $27.7 billion as a tax income.
Decreasing taxes may help industry sector to revive a little, but regarding western sanctions targeting Iran's oil revenues, Iran has no choice, but to increase tax incomes by 2.5 times. Last year, Iran's GDP was about $411.4 billion, while oil revenues from exporting crude oil and petroleum production were about $115 billion.
However, Iran's oil export has fallen to 1.2 million barrels per day on average during current year. Even, according to the latest report of the International Energy Agency, which was published on October 12, Iran's crude oil exports and output stood at respectively 860,000 barrels and 2.63 million barrels per day in September, compared to 2.4 million barrels of oil exports and 3.68 million barrels per day last year. These figures were confirmed by Iranian Parliament Vice Speaker Mohammad Reza Bahonar last month.
Oil and oil production revenues make up about a half of Iranian yearly budget, which is about $449 billion based on official USD rate in Iran, and Iran has to increase taxes revenues to compensate oil export drop.
Last week the Strategic Research Center of Iran Expediency Council published a report, written by Iran's former deputy Oil minister during Mahmoud Ahmadinejad's first presidency, Akbar Torkan.
The report showed that about 60 percent of economic sectors in Iran do not pay any taxes, while 21 percent of economic activities are unaccounted.
Iran's current state budget has increased by 930 trillion rials (about $80 billion) compared to last year's.
Then Iranian government's expenses rise year to year, while Ahmadinejad Administration has faced significant amount of deficit during the last several years.
The Iranian Central Bank issued a report in May 2012, saying government debts to internal banks until the last solar year have increased four times during six years and reached 400 trillion rials (equals to $31.7 billion based on the official USD rate) and the head of the Supreme Audit Court, Abdolreza Rahmani Fazli confirmed in June 2011 that the Iranian government has borrowed $15 billion from banks since December 2010.
Regarding these facts, decreasing taxes and social welfare charges would damage more Iranian government and the economy.

Comments

Post a Comment

Popular posts from this blog

U.S. Sanctions Slow Iran’s Electricity Generation And Trading

Image
By  Dalga Khatinoglu The peak electricity demand in Iran and its neighbor clients Afghanistan and Iraq happens in warm months, but during this period last year Islamic Republic’s exports plunged due to high demand at home. Its electricity imports from Armenia and especially Turkmenistan have been declining dramatically since September. This is possibly due to U.S. banking sanctions, which restrict Iran’s ability to pay its bills. During international sanctions prior to the nuclear deal (2011-2016), Iran was also unable to pay for Turkmen gas and electricity imports, running up $2bn in debts. Iran’s electricity trade during last and the previous fiscal years (GWh/month): ​ Power Generation Iran increased nominal power generation capacity by 2.3% last year; less than half of projected growth, but its actual electricity generation increased by only 1% to 312 TWh, a fifth of projected plan. The growth rate for actual power generation is far below nominal capacity, because
Read more

Iran in fighting with Caspian Sea pollution

Image
Iran, with its largest population on the Caspian Sea shore among other littoral countries, is keen to save the world's biggest inland body of water from pollution and has initiated a "Comprehensive plan to reduce pollution" plan. The Fars News Agency quoted the head of Department of Environment Mohammad-Javad Mohammadzadeh as saying that the plan targets preventing entry of pollutants, including household waste, especially in Gorgan and Mazandaran provinces, to the Caspian. Meanwhile, Abdolreza Karbasi, the deputy head of Environmental Protection of Iran alarmed about the ecological state of beaches, releasing warning to swimmers in the Caspian Sea. "The pollution at some parts of the sea has exceeded the authorized limit by 100 times," he said. Iranian coastal population is around 6 million people, including residents in the regions en route the rivers that flow to the Caspian, whose household waste waters enter the sea without passing through wa
Read more

Iran Launches Uncompleted Gas Project Citing Suspiciously High Production

Iran’s Oil Ministry officially opened four new phases of the South Pars gas field March 17, citing production and investment figures that don’t add up. The nominal production capacity of the newly opened phases 13, 22, 23 and 24 is 113 million cubic meters per day (mcm/d), but currently they are producing about half of that. The processing units of these phases are also operating at half capacity most probably due to Iran’s technical limitations compounded by sanctions. Phase 13 is projected to produce 56 mcm of natural gas and 75,000 barrels of gas condensate (ultra-light oil) per day, when it becomes fully operational. The capacity of phases 22-24 are together equal to phase 13. The Oil Ministry said all phases will be operating at full capacity within one year. According to Oil Ministry’s statement, some $10 billion were invested in the mentioned four phases, but ministry officials put the figure at $11 billion during the inauguration ceremony, which President Hassan Rouhani
Read more