The Plan and Budget Organization says the government registered a surplus in its fiscal 2020-21 budget.
The government’s revenues and expenses in the fiscal 2020-21 hovered around 5,631,444 billion rials ($25.14 billion) and 5,624,249 billion rials ($25.1 billion) respectively.
According to a report by Plan and Budget Organization published on its website, a budget surplus of 7,195 billion rials ($32.12 million) was registered despite economic hardship resulting from US sanctions and their repercussions on oil exports, as well as the impact of Covid-19 crisis on the economy.
“PBO managed to pay cash subsidies and government employees’ remunerations without delay. It also increased the amount of pension and retirement incomes, teachers’ salaries and paid off its outstanding debts to veterans and allowances to healthcare workers,” it said.
Noting that the government’s operating and capital expenditure budget rose by 33% and 66% respectively during last year, PBO’s report said, “Revenue projections for the last fiscal year achieved 98.6% of the target, indicating a 37.2% improvement compared with the year before.”
Tax Revenues Up 37% to Hit $8.5b
A total of 1,925 trillion rials ($8.5 billion) in tax were collected in the last fiscal year (March 2020-21), indicating a 37% increase compared with the year before.
According to Mohammad Masihi, the deputy head of Iranian National Tax Administration, the government earned 107% of the budgetary income expected from taxation in the last fiscal year.
The government’s tax revenues consist of its returns from “direct taxation” and “tax on goods and services”. Direct taxes include three groups of “tax on legal entities”, “income tax” and “wealth tax”.
Masihi said direct tax earnings stood at 1,190 trillion rials ($5.2 billion) in the year ending March 20, 2021, to account for 136% of the income projected in the budget law and 46% more than direct tax revenues of the preceding year (March 2019-20).
“Tax on goods and services generated 735 trillion rials [$3.2 billion] for the government, accounting for 80% of the expected budgetary figure and 23% more than the corresponding revenues in the previous fiscal year,” he was quoted as saying by Fars News Agency.
Referring to the sub-sections of direct tax revenues, the official said taxation of legal entities generated 560 trillion rials ($2.4 billion) during the period under review, indicating a 27% growth year-on-year.
The budget surplus came despite economic hardship resulting from US sanctions and their repercussions on oil exports, as well as the impact of Covid-19 crisis on the economy
“A total of 395 trillion rials ($1.7 billion) in income tax were collected as well, registering a 36% year-on-year rise,” he added.
Last fiscal year’s wealth tax income stood at 232 trillion rials ($1 billion), showing a 178% increase compared with the year before.
The official blamed the coronavirus pandemic and decline in transportation and fuel consumption for a 14% decrease in petroleum products’ tax revenues and said INTA collected 60 trillion rials ($266 million) from taxation of petroleum products last year.
“Self-declaration of tax returns accounted for 70% of the country’s tax revenues, which allowed INTA to focus on improving tax collection from major taxable persons. INTA also managed to collect 100 trillion rials [$400 million] from overdue tax returns,” Omid Ali Parsa, the head of Iranian National Tax Administration, was quoted as saying by Mehr News Agency recently.
Noting that tax evasion accounts for an estimate of 400-450 trillion rials ($1.7-2 billion), the official said, “Up to 40,000 bank accounts with transactions of more than 50 billion rials [$200,000] per year will be investigated technically and professionally in order to prevent tax evasion.”
Alterations in Current Fiscal Year’s Budget
One hundred Iranian lawmakers recently called for clarification on the part of Parliament Speaker Mohammad Baqer Qalibaf regarding changes in the budgetary tables after their final approval on March 16.
“Budgetary figures were surprisingly changed several times after being approved in the open session of the parliament. These changes were not restricted to budgetary tables; some extensive changes were also made in the clauses and notes of the bill by the chairman of the Joint Commission [Elias Naderan], a couple of members of the commission and individuals outside the parliament, without the knowledge of the rest of the members of the commission,” IRNA quoted the letter as reading.
The Joint Commission is a parliamentary body responsible for reviewing the budget bill as well as the five-year economic development plans proposed by the government before its final ratification.
The budgetary tables that were communicated to the government on April 14 include the following alterations, among many others:
The budget envisioned for parliament, which had been proposed by the government and approved by the parliament has increased by 56.8%.
The budget set for Majlis Research Center has increased 24.7.
The budget set for military institutions have increased significantly as well.
The Plan and Budget Organization said as the executive authority, it only carries out the law and has not been in the know of the changes. For its part, the presiding board of the Joint Commission has said they will be answerable at any time, any place for whatever ambiguities there may have been.
Member of the Iranian Parliament approved a new ceiling for the current fiscal year’s budget in March after the Guardians Council — the body in charge of ascertaining the constitutional and Islamic nature of all laws — called for fixing the flaws it identified in the draft bill.
The legislators cast 164 votes for and three votes against, while four abstained from voting, IRNA reported.
