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provision introduced under the former Ahmadinejad administration.
The draft budget assumes an oil price of around $55 per barrel, whereas for the current budget approximately $50 was assumed. Another aspect of the draft budget is a requirement to be placed on all ministries and government offices to release public reports on their overall spending to improve transparency.
6.1.1 Budget dynamics - tax issues
Iran collects $17.7bn in taxes across first 11 months
The Iranian Tax Administration (INTA) announced on March 6 that it had collected IRR800tn ($17.7bn) in taxes during the first 11 months of the current Persian Year (ends March 20), according to Fars News Agency. The Rouhani administration has cracked down on several government entities and thousands of private businesses since 2014 when, for instance, VAT became mandatory on all product sales.
Accrued direct income tax stood at IRR456tn ($10.1bn), while collected VAT reached IRR354tn ($7.86tn) during the 11-month period.
According to the latest data, some 86% of the estimated taxable income of the current Persian year of 1396 (2017/2018) has been accounted for, the INTA said.
Iran’s Minister of Economic Affairs and Finance, Masoud Karbasian, noted that in the previous Iranian year (2016-17), income from oil sales had fallen to 34% of all income flowing into government coffers.
Iran is attempting to transition from having an oil-based economy to an economy with a substantially more mixed basket of income sources. The vulnerability of an economy dependent on oil prices was demonstrated for several years running until mid-2017 when the price of only oil hovered around $50 a barrel. Despite the increase in the cost of a barrel of Brent crude seen in recent months, the Tehran administration remains determined to take big strides away from the vulnerable oil income stream.
Speaking during the 11th Conference on Tax and Fiscal Policies 2018 at the Faculty of Economics, Tehran University, Karbasian said Iran's tax as a percentage of GDP ratio improved to 8% in the 2016-17 Persian year in comparison with the 4.5% in the fiscal 2012-13, the Financial Tribune reported.
21 IRAN Country Report June 2018 www.intellinews.com