Economy Minister Farhad Dejpasand said the budget of last fiscal year (March 2020-21) was balanced, without borrowing a rial from the Central Bank of Iran.
“The government successfully passed through the crisis-ridden fiscal 2020-21 while oil revenues accounted for as little as 126 trillion rials [$545.92 million] of its 5,710-trillion-rial budget ($24.74 billion). Instead of borrowing from the central bank, we borrowed from people by selling bonds,” he was quoted as saying by IRNA.
Noting that a total of 2,130 trillion rials ($9.22 billion) worth of bonds were sold during the period, the official said, “The government earned 107% of the expected income from taxation in the last fiscal year. Earnings from privatization deals were six times more than the previous year [March 2019-20].”
According to Plan and Budget Organization, the government registered a surplus in its fiscal 2020-21 budget.
Government revenues and expenses in the fiscal 2020-21 hovered around 5.6 billion rials.
According to a report by Plan and Budget Organization published on its website, a budget surplus of 7,195 billion rials ($31.28 million) was registered despite economic hardship caused by US sanctions and their effects on oil revenues, as well as the impact of Covid-19 crisis on the economy.
“PBO managed to pay cash subsidies and government employees’ remunerations without delay. It also increased the amount of pension, teachers’ salaries and paid off outstanding debts to veterans and benefits of healthcare workers,” the report said.
Noting that the government’s operating and capital expenditure budget rose by 33% and 66% respectively during last year, it added that 98.6% of revenue projections for the last fiscal year were achieved, indicating a 37.2% improvement compared with the year before.”
A total of 1,925 trillion rials ($8.3 billion) in tax were collected in the last fiscal year, indicating a 37% increase compared with the year before.
According to Mohammad Masihi, the deputy head of Iranian National Tax Administration, the government earned 107% of the expected budgetary income from taxation in the last fiscal year.
The government’s tax revenues consist of returns from “direct taxation” and “tax on goods and services”. Direct taxes include three sub-categories of “tax on legal entities”, “income tax” and “wealth tax”.
Masihi said direct tax earnings stood at 1,190 trillion rials ($5.17 billion) in the year ending March 20, 2021, to account for 136% of the projected income in the budget law and 46% more than the direct tax revenues of the preceding year (March 2019-20).
“Tax on goods and services generated 735 trillion rials [$3.2 billion] for the government, accounting for 80% of the expected budgetary figure and 23% more than the corresponding revenues in the previous fiscal year,” he was quoted as saying by Fars News Agency.
Referring to the sub-categories of direct tax revenues, the official said taxation of legal entities generated 560 trillion rials ($2.4 billion) during the period under review, indicating a 27% growth year-on-year.
A total of 395 trillion rials ($1.7 billion) in income tax were collected as well, registering a 36% year-on-year rise.
Last fiscal year’s wealth tax income stood at 232 trillion rials ($1 billion), showing a 178% increase compared with the year before.
The official blamed the coronavirus pandemic and decline in transportation and fuel consumption for a 14% decrease in oil products tax revenues and said INTA collected 60 trillion rials ($266 million) from taxation of petroleum products last year.
“Self-declaration of tax returns accounted for 70% of the country’s tax revenues, which allowed INTA to focus on improving tax collection from major taxable persons. INTA also managed to collect 100 trillion rials [$400 million] from overdue tax returns,” Omid Ali Parsa, the head of the Iranian National Tax Administration was quoted as saying by Mehr News Agency recently.
Noting that tax evasion accounts for an estimate of 400-450 trillion rials ($1.7-2 billion), the official said, “Up to 40,000 bank accounts with transactions of more than 50 billion rials [$200,000] per year will be investigated technically and professionally in order to prevent tax evasion.”
