Domestic Economy

Gov't Expenditures Affected by Decline in Tax Revenues

Gov't Expenditures Affected by Decline in Tax RevenuesGov't Expenditures Affected by Decline in Tax Revenues

Tax revenues reached 75,000 billion rials ($468.75 million) in the month ending April 19, which is far lower than revenues needed to meet government expenditures amounting to 270,000 billion rials ($1.68 billion) to pay its employees, pensioners and those supported by Imam Khomeini Relief Foundation and State Welfare Organization, the director of the Iranian National Tax Administration said.
“The government could experience a decline of at least 400 trillion rials ($2.5 billion) in tax revenues as a result of the new coronavirus, if the economic effects of the pandemic on businesses go away within the next couple of months,” Omid Ali Parsa was also quoted as saying by Fars News Agency.
The INTA chief noted that numerous aspects of the coronavirus crisis on economic sectors are not clear, so it is not possible to estimate tax revenues to be gained from each tax base.
“But what is patently clear is that business owners pay taxes on the profits of their businesses; you can’t tax them when they haven’t made any profits,” he said. 
“Under the best-case scenario, about 1,400 trillion rials [$8.75 billion] out of 1,800 trillion rials [$11.25 billion] set in the budget law for tax revenues in the current [fiscal] year [March 2020-21] should materialize, if efforts to contain the economic impacts of the virus prove to be effective by the end of spring [June 20].” 
According to Parsa, tax revenues increased by 31% in the last fiscal year (March 2019-20) compared with the year before to reach 1,430 trillion rials ($8.82 billion).
The share of tax revenues in the budget increased from 37% in the fiscal 2018-19 to 54% last year, Mehr News Agency quoted him as saying.  
“The average growth in tax revenues over the past five years was 21%.” 
Parsa noted that value added tax gains hit 250 trillion rials ($1.54 billion). 


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