Iran Budget Deficit Hits $4.5b

Iran’s budget deficit came in wider than expected in the five months of the current fiscal year (March 21-Aug. 22) and reached 182.7 trillion rials ($4.56 billion), the latest data released by the Central Bank of Iran showed.

The shortfall for the period was higher than forecast, which amounted to 136.5 trillion rials ($3.41 billion).

To cover the widening deficit, the government has been issuing bonds. The five-month data show 231.3 trillion rials ($5.78 billion) worth of bonds were issued during the period, 8.2% more than the corresponding period of the year before.

Spending stood at 893.9 trillion rials ($22.34 billion) during the period under review, indicating a rise of 15.1% year-on-year. The figure is around 83% of the expenditure predicted by the government in the budget.

The government only spent 47.6 trillion rials ($1.19 billion) on development projects, not only 8.2% less than the similar period of last year but also much lower than the projected 303.1 trillion rials ($7.57 billion).

Revenues associated with the sales of oil and petroleum products reached 331.8 trillion rials ($8.29 billion) during the period, indicating a 97% rise compared with the same period of last year.  

This comes as the government’s overall revenues, including tax proceeds, amounted to 469.6 trillion rials ($11.74 billion), registering a 0.5% decline YOY. Although tax revenues were projected to hover around 494.5 trillion rials ($12.36 billion), they only reached 367.5 trillion ($9.18 billion).

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”.

Overall, direct tax revenues stood at 197.1 trillion rials ($4.92 billion) during the five months, registering a decline of 0.5% YOY.

Indirect taxes, including “tax on imports” and “tax on goods and services”, reached 170.4 trillion rials ($4.92 billion), indicating a 7.9% rise YOY.  

Tax on imports generated 33.6 trillion rials ($840 million), 15.7% more than last year's corresponding period and tax on goods and services earned the government 136.8 trillion rials ($3.42 billion), up 6.1% YOY. Value added tax, which is a subcategory of tax on goods and services, increased by 18.7% to reach 98.5 trillion rials ($2.46 billion).