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Economy Minister Impeachment Bid Fails to Win Support
Economy, Domestic Economy

Economy Minister Impeachment Bid Fails to Win Support

In his two years as Minister of Economic Affairs and Finance Ali Tayyebnia has been summoned thrice by the Parliament to ease lawmakers’ seemingly unending worries on some of the country’s economic issues such as performance of the stock market, depreciation of the rial and tax increases.

Although following three earlier failures some MPs demanded impeachment of the minister, the parliament’s presiding board didn’t comply with the appeal, arguing that under the Parliament’s regulations, three parliamentary warnings to a minister could, but not necessarily should, lead to impeachment.

The lawmakers’ warned Tayyebnia in December 2013 for the first time and the second was in February 2015. The warnings were related to a fall in the value of the national currency and Tehran Stock Exchange’s rout respectively; but the third and the most controversial warning the minister received from the lawmakers concerned tax regulations.

On August 9, Tayyebnia went to Majlis to take questions from a member of the Parliament’s research center, Mehrdad Bazrpash, for “putting strong pressure on small enterprises by excessive tax increases.”

Bazrpash claims that taxes on some small enterprises have been raised between 4 and 5 or in some cases 10 times, which considering the poor health of the economy, is not fair. Instead, he believes that the government should identify tax-evaders and implement the existing regulations more effectively to increase its tax revenues.

Tayyebnia, however, denies outrageous tax increases, arguing that between 2001 and 2015 government revenues from payroll taxes on small businesses have annually  increased by 17% on average—the lowest increase among other forms of tax revenues such as value-added tax. He added that the government has been able to curb tax evasions thanks to increased transparency in the government’s economic transactions using new communication technologies.

Furthermore, many experts question the logic of such objections to Tayyebnia’s economic performance in the past two years. Parliament member, Mohammad Qasim Osmani, says questioning the government about tax revenues is irrelevant as the economy ministry implements laws ratified by Parliament and tax increases are no exception.

Many members of the Parliament rank Tayyebnia on top of the list of President Hassan Rouhani’s successful team members. According to Hamidreza Fouladgar, head of the Parliament’s Commission on National Manufacturing and Implementation of Policies of Article 44 of the Constitution, the government has been successful in stabilizing the economy.

Tayyebnia’s policies have been mainly focused on taming inflation. Since Rouhani took office in 2013, his administration reduced average annual inflation from 34.7% in 2013 down to 15.6% in 2014 based on data released by the Central Bank of Iran.  The latest figures released by the CBI show year-on-year inflation of 14.2% in July.

Deputy head of Iran Chamber of Commerce, Industries, Mines and Agriculture Gholam Hosein Shafei, on Thursday referred to the reduction in inflation as “the most valuable and important” achievement of Tayyebnia’s ministry in addition to restoring stability to the market.

At the moment the majority in Parliament seems reluctant to proceed with the impeachment.Deputy Majlis Speaker Hassan Abutorabi told IRNA the Parliament plans to hold a meeting between lawmakers and Tayyebnia to settle the issue to prevent a possible impeachment.

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