Proposal to Increase ICHHTO’s 2016-17 Budget

Proposal to Increase  ICHHTO’s 2016-17 Budget  Proposal to Increase  ICHHTO’s 2016-17 Budget

The Iranian government is ostensibly investing a lot of hope in the tourism industry to jumpstart the sluggish stagnant economy following the lifting of international sanctions.

In the draft budget submitted to the Majlis by President Hassan Rouhani on Sunday, the Iran Cultural Heritage, Handicrafts and Tourism Organization is set to receive 6.98 trillion rials ($194 million) in the next fiscal year (starts March 20), a 44% increase compared to its  previous budget of $134 million.

There has been no change in the exit tax (a fee charged whenever an Iranian leaves the country). Air travelers are charged 750,000 rails ($21) and those traveling by land and sea  pay 250,000 rials ($7). The new budget calls for allocating 100,000 rials ($3) from every exit fee be used to help develop tourism infrastructure.

The exit tax applies only to Iranians. In many countries the exit tax is for both foreigners and locals who leave the country.

Since oil revenue will make up less than 25% of the 2016-17 proposed budget, down from 33% in the previous year, some believe that the government is gradually moving away from the so-called black gold in favor of more sustainable, ecofriendly and stable alternatives.

Given the boost in ICHHTO funding, the administration may well be contemplating tourism as a possible alternative, although this income avenue still has a very long way to go.

Following a 12-year standoff, sanctions against Iran were lifted at the weekend as a result of Tehran’s fulfillment of its obligations outlined in the Joint Comprehensive Plan of Action — the official name of the landmark nuclear deal signed in July 2015 between Iran and the P5+1 (the five permanent members of the UN Security Council plus Germany).

Following the signing of the accord last year, industry insiders and officials had said no other sector in Iran would benefit from the deal as much as tourism, citing Iran’s untapped potential and its  reputation as an unknown, exotic destination for most western tourists.

Lifting of sanctions will not only help improve Iran’s international image, but also allows foreign firms and investors to enter the nascent travel market, which is in dire need of investment if it is to meet its lofty goal of 20 million annual tourists by 2025.

Iran currently receives five million tourists every year, most of whom are pilgrims who visit the shrine of the eighth imam of Shia Muslims, Imam Reza (PBUH), in Mashhad.

Among the less developed areas in need of infrastructure investment are accommodation and air transport.

Iran has 1,100 hotels and guest houses, of which only 130 are four- and five-star establishments. The goal is to increase the number of quality hotels to 400 in 10 years.

In the transportation sector, Iran needs more than 400 new commercial aircraft. Tehran was deprived of buying new planes due to the international economic sanctions. Reports this week said a preliminary deal has been reached with the European consortium Airbus to buy 114 passenger planes.