Domestic Economy

Economy Minister Outlines Roadmap to Reforms

Economy Minister Outlines Roadmap to ReformsEconomy Minister Outlines Roadmap to Reforms

Minister of Economic Affairs and Finance Ali Tayyebnia has issued instructions and directives to eight deputy ministers and heads of departments and organizations affiliated to the Economy Ministry, calling on them to align their activities with the ministry’s strategic plans and projects.

Deputy Ministry for Financial Supervision and Treasury Affairs, Islamic Republic of Iran’s Tax Organization, Securities and Exchange Organization, Department for Economic Affairs, Islamic Republic of Iran’s Customs Administration, Department for Banking and Insurance Affairs, Iran’s Privatization Organization and the Organization for Economic Investment and Technical Assistance of Iran have been addressed by the economy minister, Mehr News Agency reported.

As part of his letters, Tayyebnia has urged deputy economy minister for financial supervision and treasury affairs, Seyyed Rahmatollah Akrami, to pursue the establishment of an electronic treasury management system and productive management of government assets, referring to them as two key projects on the ministry’s agenda.

In a letter to the head of Islamic Republic of Iran’s Tax Organization, Ali Asgari, the minister called for simplification of the tax collection process. Emphasizing the important role of a comprehensive tax system in improving efficiency and transparency in tax-related activities, Tayyebnia also noted that it would help improve the business environment.

He also called for the development of online services and creation of a tax database, urging IRITO to actively participate in the improvement of tax laws.

> Capital Market on Par With Banking System

Addressing head of Securities and Exchange Organization, Mohammad Fetanat, Tayyebnia emphasized on the development of stock market, noting that “the capital market should reach a point where it is on par with the banking system in financing the country’s fiscal needs.”

“Volatilities and short-term issues should not be able to harm the capital market in the long run. We must strive to enhance capital market financing (through both primary and secondary markets) in the coming years to provide financing in parallel with the banking incentives,” he wrote in his letter.

To this end, he suggested conducting educational courses for managers to familiarize them with the nature of the capital market. He also called on SEO to establish a joint working committee with the Organization for Economic Investment and Technical Assistance of Iran to absorb foreign investors to Iran’s mercantile and energy exchange markets.

On July 5, President Hassan Rouhani issued directives to his First Vice President Es'haq Jahangiri for preparing comprehensive plans to develop the primary capital market. The importance of this letter lies in the fact that it is the first time that the president, as the head of the government’s executive branch, has issued direct instructions for improving the capital market.

Accordingly, in a meeting with the Stock Exchange Organization High Council last week, Jahangiri asked the economy minister to come up with plans for resolving the capital market’s problems.

> Improving Business Environment

In a letter to Shapour Mohammadi, the head of the Department for Economic Affairs, Tayyebnia called for simplification of the process of issuing work permits in line with the key objective to improve the business environment.

He also wrote a letter to head of Islamic Republic of Iran’s Customs Administration, Masoud Karbasian, commending him for "creative and effective use of information and telecommunications technology to improve online customs services." He urged the implementation of "Single Window System" for cross-border trade to help improve efficiency and transparency in customs activities.

The system is a trade facilitation idea that seeks to enable cross-border traders to submit regulatory documents such as customs declarations, applications for import/export permits, trading invoices and investment permits to a single entity and/or single location.

In a non-single window environment, traders have to deal with multiple government agencies in multiple locations to obtain the necessary papers, permits, and clearances to complete their import or export processes.

The minister also called on head of Department for Banking and Insurance Affairs, Mohammad Parizi, to enhance the insurance penetration rate in the country.

He also urged head of Iran’s Privatization Organization, Mirali Ashraf Abdollahpour Hosseini, to devise policies for the proper implementation of "Justice Shares Scheme" to accelerate the process of privatization in line with the general guidelines of Article 44 of the Constitution.

Article 44 of the Constitution compels the government to transfer 80% of the shares of state-owned companies to nongovernmental entities, 40 percent of which through Justice Shares and the rest through the bourse organization. Under the scheme, millions of Iranian families in vulnerable social classes should receive shares in state-owned firms, the value of which will be reimbursed in 20 years from the dividends generated by those shares.

The minister also called on the Organization for Economic Investment and Technical Assistance of Iran to pave the way for absorbing foreign direct investments after the possible lifting of economic sanctions imposed against Iran by the West over the country's nuclear energy program.

> Eight Key Projects

In April this year, the minister introduced the eight key projects as folows:

* Establishment of a Single Window System to facilitate cross-border trade

* Establishment of an integrated financial information exchange system

* Productive management of government assets

* Improving transparency in the government's financial operations through electronic treasury management

* Improving the business environment to encourage public participation in the economy

* Balancing and updating the country’s financial system

* Improving transparency in the taxation system

* Management of Justice Shares and establishment of public funds.