Iran seeks to increase tax revenues, cut NDF share to compensate falling oil prices
Tehran, Iran, Dec. 24
By Milad Fashtami - Trend:
An Iranian MP said that the government is counting on an increase in tax revenues and reduction of National Development Fund's share out of oil revenues to compensate for oil price fall.
Hossein-Ali Hajidelijani told Trend Agency on Dec. 24 that if the falling trend of global prices continues, the country will face budget deficit in the next Iranian calendar year (to start on March 21, 2015).
"The law indicates that we need to increase the NDF's share out of the oil revenues by 3 percent each year. The figure was 29 percent in the current year, so next year's share had to be
32 percent, but based on the government's proposal just some 20 percent of the oil revenues will go to the NDF next year, so the government will have some 12 percent more to spend and compensate any decrease in oil revenues," he explained.
The NDF is Iran's sovereign wealth fund. It was founded in 2011 to replace the Oil Stabilization Fund.
Based on Article 84 of the Fifth Five-year Socio-Economic Development Plan (2011-2015), the National Development Fund was established to transform oil and gas revenues to productive investment for future generation.
The Iranian government submitted next year's budget bill to the parliament on Dec.7.
Next year's national budget bill is based on an oil price of $72 per barrel and a projected average exchange rate of 28,500 rials to the U.S. dollar for the fiscal year.
According to President Rouhani, the administration has taken necessary actions to decline negative effects of the oil price countdown.
The government expects to export 1.3 mbpd of crude oil and condensate at $72/barrel during next fiscal year, unchanged in volume, but decreased by 28 percent in value compared to the current budget law.
Rouhani said that about $24 billion of oil revenues is forecasted for next fiscal year, adding share of oil revenues in next year's budget bill has decreased to 31.5 percent compared to 45 percent of oil revenues in current year's budget.