EghtesadOnline: The government’s revenues in the first half of the current fiscal year (March 21-Sept. 22), including tax proceeds, amounted to 567.8 trillion rials ($14.19 billion), registering a 3.7% decline year-on-year.
The latest data released by the Central Bank of Iran show revenues associated with the sales of oil and petroleum products reached 446.6 trillion rials ($11.16 billion) during the period, indicating an 82.2% rise compared with the same period of last year, but less than the projected 580.4 trillion rials ($14.51).
Although tax revenues were estimated to hover around 593.5 trillion rials ($14.83 billion), they only reached 431.2 trillion ($10.78 billion), registering a 0.4% decline YOY.
The government’s tax revenues consist of its returns from direct and indirect taxation. Direct taxes include three groups of “tax on legal entities”, “income tax” and “wealth tax”, Financial Tribune reported.
Overall, direct tax revenues stood at 231.9 trillion rials ($5.79 billion) during the six months, registering a decline of 5.1% YOY.
Indirect taxes, including “tax on imports” and “tax on goods and services”, reached 199.3 trillion rials ($4.98 billion), indicating a 5.6% rise YOY.
Tax on imports generated 41.2 trillion rials ($1.03 billion), 1.8% more than last year’s corresponding period and tax on goods and services earned the government 158.1 trillion rials ($3.95 billion), up 6.6% YOY. Value added tax, which is a subcategory of tax on goods and services, increased by 11.9% to reach 107.5 trillion rials ($2.68 billion).
The report also shows government spending hit a whopping 1,074.9 trillion rials ($26.87 billion) during the period under review, posting a rise of 13% over last year's corresponding period.
Iran’s budget deficit came in wider than expected in the six months of the current fiscal year to reach 181.1 trillion rials ($4.52 billion). The shortfall for the period was higher than forecast, which was 163.8 trillion rials ($4.09 billion).
To cover the widening deficit, the government has been issuing bonds. H1 data show 253.3 trillion rials ($6.33 billion) worth of bonds were issued during the period, 7.7% less than the corresponding period of the year before.
The government only spent 78.2 trillion rials ($1.95 billion) on development projects, not only 36% less than the similar period of last year but also much lower than the projected 363.7 trillion rials ($9.09 billion).
According to Director General of the Supreme Audit Court of Iran Adel Azar, capital expenditure budget accounted for 25% of the budget in March 2011-12 fiscal year compared to 13% last year (March 2016-17). This comes as the share of operating budget increased by 87% last year from 74% in 1390.
The government is busy these days drafting the budget for the upcoming fiscal year (March 2018-19). Government Spokesman and President of Planning and Budget Organization Mohammad Baqer Nobakht said the budget bill will be submitted to the parliament on December 5.
“One of the features of next year’s budget is the performance-based allocation of budget to each governmental body and not the traditional method of distributing the money according to the treasury inflows,” he said.
The parliament-approved budget needs the final endorsement of the Guardians Council—the body in charge of ascertaining the constitutional and Islamic nature of all laws.
Addressing an open session of the parliament on Monday, Azar said the current budget allocation approach in Iran has reached an impasse and it needs to undergo extensive modifications.
"Over the years, the government and the parliament have focused on committing resources to meet all but 100% of the operating budget rather than the capital budget," he was quoted as saying by IRNA.
The current fiscal year’s budget stood at 11.5 quadrillion rials ($305 billion) as per the law approved by the parliament in March just before the beginning of the year. It includes 3.98 quadrillion rials ($90.5 billion) earmarked as “general revenues”, in addition to a whopping 8 quadrillion rials ($211 billion) to fund state companies, institutions and banks.