TEHRAN: First Vice President Es’haq Jahangiri has tasked the Ministry of Economic Affairs and Finance with implementing 14 priority projects in the current Iranian year (March 2017-18). Most of these projects were ratified by the Headquarters of Resistance Economy and initiated during the first tenure of President Hassan Rouhani, but need to be completed. Resistance Economy refers to a set of principles outlined by the Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei aimed at bolstering domestic production, curbing dependence on oil exports, improving productivity and encouraging Iranians to buy domestically-manufactured products. Iran is ranked 120 among 190 economies in the ease of doing business index, according to the latest World Bank annual ratings. On average, Iran’s rankings have improved by eight spots annually since 2013, when the country stood at 152nd place. Jahangiri has urged the Economy Ministry to direct its efforts toward improving the index by 10 spots this year.
Last year, the government announced measures to transfer its accounts from agent banks to the Central Bank of Iran in cooperation with the Treasury. The measures make up the Electronic Treasury scheme that aims to return the accounts from government and private-owned agent banks to the Treasury. In February, Tayyebnia called on deputy economy minister for financial supervision and treasury affairs, Seyyed Rahmatollah Akrami, to pursue the establishment of an electronic treasury management system as well as productive management of government assets, referring to them as two key projects on the ministry’s agenda. Once again, Jahangiri has referred to the establishment of e-treasury as one of the main priorities of the government. The privatization of public economic entities includes three stages: pricing the entities, transferring them to real private sector and readying the remaining entities for transfer. The first vice president has called for the completion of the privatization process. According to Iran National Tax Administration, value added tax accounts for 50% or 1,700 trillion rials ($45.04 billion) of government revenues and the administration pays over 600 trillion rials of VAT revenues to municipalities and 50 trillion rials to the Health Ministry for the Healthcare Reform Plan.
The VAT Law, which took effect in the Iranian year to March 2009, is being extended every year. VAT currently stands at 9% in Iran. Jahangiri wants a wider implementation of VAT in economic sectors. The government piloted its newly-drafted Integrated Taxation System in Tehran, Isfahan and Kermanshah last year and plans to implement the system in other provinces. The new code overhauls tax exemptions, adds new taxpayers and controls evasions. According to Tayyebnia, in the new tax code, manufacturing activities get new exemptions to boost investment in the real economy and help economic recovery. “Tax breaks given to many companies have been cut in the new code and, more importantly, even state-owned institutions that were not under government control will become liable for taxation,” he added. Government officials have stated on various occasions that over 60% of the Iranian economy are not being taxed, which figure includes estimates of gray market activities. Tayyebnia is expected to accomplish the integration of the taxation system to make it more equitable and effective.
