Page 23 - IRANRptNov18

6.0 Public Sector 6.1 Budget
Iranian MPs waste no time in rejecting 2018/2019 budget
Iranian MPs rejected the draft budget framework for the 2018/2019 Persian year at the first hurdle, an Iran Front Page (IFP) report said on January 28. Several problems with the draft were apparently identified by parliamentarians but media were yet to discover what those were exactly. In terms of public spending the draft is quite austere and there is some discussion among analysts as to whether, given the nationwide protests which were largely blamed on mounting economic hardship , the Rouhani administration might be under some pressure to be more generous.
Rouhani’s draft budget for non-state enterprise expenditures is up 6% on last year’s budget but has been tabled with inflation running at almost 10%. The proposed budget in its entirety amounts to 11,929 trillion rials ($337bn).
Rouhani said in a speech carried live by state TV that the budget would help the country work towards full employment, eliminate poverty and deliver social justice. It must also address a building Iranian banking crisis.
The draft budget also includes provisions for bringing all poor families to a minimum standard of living through a new social security programme. On the other hand, it should see some 30 million Iranians cut from a basic welfare provision introduced under the former Ahmadinejad administration.
6.1.1 Budget dynamics - tax issues
Iranian government’s departure tax earnings up 117% in first third of Persian year
The Iranian government earned Iranian rial (IRR) 3tn ($24mn at the free market rate) from the country’s air, sea and land departure tax in the first four months of the current Perisan year (March 21 to July 22), marking an increase of 117% y/y, according to Central Bank of Iran (CBI) figures cited by the Financial Tribune on September 18.
Iran upped the departure tax around threefold from IRR750,000 to IRR2.2mn during 2017. However, that rate only applies to the first departure. The exit fee rises for each subsequent trip in the given year, until it reaches IRR4.4mn.
23 IRAN Country Report November 2018 www.intellinews.com