Expert says Iran should compensate oil revenues drop with tax income

Business Materials 19 November 2014 16:14 (UTC +04:00)

Baku, Azerbaijan, Nov.19

By Fatih Karimov - Trend:

Iran should compensate oil revenues drop with tax income, economic expert Ali Dini Torkaman said.

At present, 30 percent of the country's gross domestic product is exempted from paying taxes, Iran's ISNA news agency quoted Torkaman as saying on November 19.

He emphasized the need to curb tax evasion.

"The tax to GDP ratio is about 30 percent in advanced countries. But, in Iran the figure is 10 percent. Through improving the taxation system the ratio can be increased to 15 percent gradually," he said.

Torkaman proposed that oil price is appropriate to be set to $80 per barrel in the next year's budget bill.

Iran plans to tighten spending and raise taxes to help offset the negative impact of sharply lower oil prices and international sanctions on the state budget, its oil minister said, AFP reported on November 15.

OPEC member Iran, with the world's fourth-largest oil reserves, is heavily reliant on petroleum exports and adopted a budget for the current fiscal year based on a projected price of $100 per barrel.

But global oil prices are now well below $80 a barrel, having collapsed by some 30 percent since June, and they are expected to keep sliding well into 2015.

Iran's Oil Minister Bijan Namdar Zanganeh said previously that the country intends to adopt a contractionary monetary policy for next year and raise tax revenues to compensate for the affects of the oil price slide.

Zanganeh did not provide details on plans for the next fiscal year, which will run from March 21, 2015 through March 20, 2016.