Iran’s 2020 Budget: Mirage or Reality?

By Ali Latifi

At the bottom lines, each dollar is calculated at approximately 13000 tomans.

Earlier this week, Iranian regime President Hassan Rouhani passed a 2,000 trillion toman budget (around $153.8 billion) for Iran’s 2020 fiscal  year to the regime’s Majlis (parliament) for approval. Rouhani’s budget has increased by more than 25%, despite a sharp drop in oil sales compared to 2019.

The government’s budget is set at 484 trillion tomans (around $37.2 billion).

This figure was about 440 trillion tomans ($33.8 billion) in the current fiscal year’s budget and later reduced to 386 trillion tomans (around $29.7 billion) due to the decline in oil exports.

However, Rouhani does not elaborate on the funding sources for Iran’s 2020 fiscal year budget and has invested on a mirage.

One of Rouhani’s budget sources that he counts on is daily exports of 500,000 barrels of oil and revenue equivalent to 60 trillion tomans.

Yet according to statistics provided by the Kepler oil tanker tracking company, Iran exported only 213,000 barrels a day last month. Of course, as sanctions tighten, the regime’s oil sales appear to be even lower.

Other resources overlooked by Rouhani, such as tax and customs revenues, are an illusion and Mirage. Due to the fact that the regime’s largest economic entities are affiliated with Khamenei and the Revolutionary Guards (IRGC), controlling all the country’s capital, are exempted from paying taxes.

These institutions are currently reluctant to reduce their astronomical revenues, deduct the costs of domestic repression and warmongering in the region, and will not pay taxes.

The regime’s official IRNA news agency reported on December 10 that the foundations and institutions under the Islamic Republic supreme leader’s supervision pay only 0.008 percent of the country’s total taxes despite controlling ten percent of the Iranian economy.

According to IRNA, the private sector should cover 27 percent of total tax revenues in next year’s budget, while their partnership is less than 15 percent of the total Iranian economy.

The expected share for state-owned companies is also less than 6.5 percent, while these companies hold more than 70 percent of the country’s economy.

Due to the lack of information and transparency in the Iranian economy, government officials and economy experts are expressing very different figures on tax evasion in the country.

On the other hand, due to the decline in imports and exports, customs revenue has also fallen sharply. As a result, much of Rouhani’s resources for Iran’s 2020 fiscal year budget are absurd.

“Point-to-point inflation has jumped from 52 percent to 27 percent, which is not clear where it came from and why people don’t feel this way,” Rouhani said in a speech to the Majlis. This is so nonsensical that even Majlis members protested and called him a liar.

Of course, based on this scenario, Rouhani is planning to not raise wages next year. At the same meeting, Rouhani said, “We will increase staff salaries by 15 percent next year”, while the Central Bank has announced 41 percent inflation. This means that the fixed employees’ purchasing power drops to less than a half. Also, as gas price tripled and the poverty line being set at eight million tomans ($615.38) per month; a 15 percent increasing in salaries is another plundering from the pockets of the society’s lower classes.

Rouhani pointed to the imaginative growth that will supposedly result in progress next year in the fields agriculture, medical treatment, development and so forth.

Meanwhile, the International Monetary Fund (IMF) has announced Iran’s economic growth for the next year will be negative 9%.

According to a proverb in Farsi, a liar has little memory. That is, a liar has poor memory and after a short period he/she forgets what he/she said before.

So now, Rouhani forgets that he himself acknowledged a deficit of two-thirds in Iran’s 2020 fiscal year budget.

“We have an annual budget of about 450 trillion tomans (around $34.6 billion) and we expect from taxes we can get next year is 150 trillion tomans (around $11.5 billion),” Rouhani said in a recent speech in Kerman, south-central Iran. “Although our Ministry of Economy says it is 140 trillion tomans (around $10.8 billion). So, what happens to the rest if we provide 150 trillion tomans from that 450 trillion? Where should we get the remaining 300 trillion tomans ($23.1 billion)?”

Rouhani has always been, and still is, anxious about oil revenues. He told the state-run Mashregh website: “If we were in a normal situation, we would sell $60 billion a year in oil and if we exchange it to tomans we’ll have 600 trillion tomans. We could easily get two times more than what we needed. “

Consequently, in a state of crises and economic suffocation, the mirage budget bill is nothing but deceptive propaganda and in practice there is only continuous poverty for the people and enormous costs of repression.

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