30 per cent of Iran’s national income paid as subsidies - minister

Business Materials 30 October 2012 12:33 (UTC +04:00)

Azerbaijan, Baku, Oct.30 /Trend G.Mehdi/

Iranian Finance and Economic Affairs Minister, Shamseddin Hosseini, said that 30 per cent of the national income is paid as subsidies, according to the Mehr News Agency.

Subsidies can be regarded as negative tax, he said, adding that just seven per cent of the gross domestic product is subject to taxation.

On August 10, the State Tax Affairs Organisation's director, Ali Askari, said that the current year's budget law has envisaged earning 340 trillion rials (some $27.7 billion) as a tax income. The current Iranian calendar year started on March 20.

Iran gained as much as 280 trillion rials (some $23 billion) in tax income in the past calendar year. Direct tax incomes accounted for 220 trillion rials of the total sum.

The subsidy reform plan which started in December 2010 pays out $37 to each Iranian individual monthly while eliminating subsidies for fuels and some commodities. The plan was initially expected to cause about $32 billion in liquidity.

However greater demand for the cash subsidies and the government's money borrowed from the Central Bank to pay for the subsidies led to $45 billion being in liquidity.