Tax should replace oil revenues in budget

TEHRAN Dec 17 (Shana)–Reliable tax income is a good substitute for volatile oil prices in the budget, Minister of Economic Affairs and Finance Ali Tayyebnia said.
In a message to Iran’s Fiscal and Tax Policies Forum which kicked off today in Tehran, Tayyebnia said in recent years the country’s budget has been largely reliant on oil revenues with restrictive consequences on fiscal policies of the government.

He continued: “Boosting share of non-oil exports and at the same time raising the share of taxes as a sustainable source of income in the budget is an appropriate solution to edge down reliance on oil revenues.”

The minister further noted that the government was determined to change economic situation fundamentally by having a scientific attitude towards different aspects of the economy.

He said: “Despite remarkable initiatives taken over the last two decades in the country with the aim of developing an appropriate tax system, taxes have not found their right place in the economy as a sustainable fiscal instrument which is partly the result of strong role oil revenues plays in Iran’s economy.”

Exemption of a large part of the economy from paying taxes, which is estimated at 43 percent of GDP, the weak role of the taxes in the economy, low ratio of taxes to GDP and low level of the share of taxes in funding current expenditure of the government are indications of the inappropriate place of taxes in the economy, Tayyebnia said.



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