Oil role pales in Iran’s next year budget
Dalga Khatinoglu, Trend Iran News Service Chief/
The Iranian government is preparing the next solar year budget to submit to the Parliament, but reportedly with significant difference from current year budget in details.
Iran is expected to sell $ 81 billion oil, condensate and gas during current solar year, according to the budget law, which shares 17.5 percent of $461 billion-budget (based on official USD rate in Iran, 1226 rials, and also considered $85 per barrel).
The current state budget relies $53 billion worth income on petroleum, but according to Iranian president's deputy on budget issues Rahim Mambini, the administration wants to decrease budgets' dependence on oil by 30 to 40 percent in next year.
Earlier, the head of budget commission in the Parliament Gholam-Reza Mesbahi Moghaddam said that the government aimed to consider 1 million barrels drop in oil export in next year budget bill.
Some 1 million barrels per day decrease in oil export means losing $40 billion oil incomes in a year.
How can Iran avoid from contraction budget?
According to current state budget, some 23 percent of oil export revenues should be transferred to the National Development Fund and this figure can be decrease in next year budget and allocates to government budget.
Iranian budget is written based on national currency, rial. There is above double difference in value between USD rates in budget law and Iran's Forex Center. Iranian government can propose USD rate 2 times more than current value as well. Then, governments' incomes in national currency will increase to avoid shrink in budget volume.
The third way is increasing taxes revenues.
But regarding this fact that International Monetary Fund predicted an economic contraction of 0.9 percent (-0.9 percent GDP growth) in Iran for this year, and also because of 25.2-percent inflation rate, increasing taxes would damage industry, service and agriculture sectors and cause higher inflation and unemployment rates.
However, it can manage or review the taxation sector.
According to the current yearly budget, tax income shares seven percent of Iran's GDP worth $27.7 billion.
One of the problems in Iran's taxation sector is the existence of unaccounted economic activities which share 21 percent of the Iranian economy.
Meanwhile 60 percent of the economic sectors in Iran do not pay any taxes according the Iranian Strategic Research Centre Expediency Council's latest report, written by Iran's former deputy Oil Minister during Mahmoud Ahmadinejad's first presidency, Akbar Torkan.
And finally, in budget law, $85 is considered for a barrel of crude, but this figure can increase to at least above $90, because according to IEA, OPEC and other reliable sources' prediction, oil prices wouldn't decrease in 2013.
However, the Iranian government will lose $40 billion oil revenues next year and absolutely will face with significant economic damage finally.