Iran Gov’t Expects Less Revenue From ICT Sector

EghtesadOnline: In the coming fiscal (2019-20), Iran government expects to earn 100 trillion rials ($864 million) from the ICT sector, down 9% compared to projected income for the current year that ends in March.

News ID: ۷۴۶۵۱۸

19 January 2019

The Majlis Research Center (MRC) has made a detailed evaluation of the next budget bill President Hassan Rouhani presented to the Majlis last month.

In a report published by the center on its website (rc.majlis.ir), the government expects to generate less from the information and communication technology sector in the coming year.

Main sources of revenue are expected from telecom operators leasing infrastructure from the government and from fees people will pay for their new electronic national ID cards, according to Financial Tribune.

In sum, government revenue from the ICT sector is expected to decline 9% -- from the projected 109.3 trillion rials ($942 million) in the current year to 100 trillion rials ($864 million) next year.

Researchers at the MRC say if the galloping inflation is also taken into account government income from the sector will have shrunk more than what the above numbers indicate. Data published by the Central Bank of Iran show Iran’s point-to-point inflation in November reached 39.9%, the highest in the past five years.

The Communication Regulatory Authority has the biggest share (63.8%) in government income from the ICT sector with its projected earnings amounting to 64 trillion rials ($551.7 million). The ombudsman’s income has remained unchanged for the past two years.

Government Spending

As per the proposed budget, the government wants to spend 103 trillion rials ($892 million) on ICT-related development projects, wages and its other financial commitments in the sector.

A glance at budgetary figures shows that the government has also slashed the ICT sector’s share in projected public spending by 13%, from $1.02 billion in the current year to $892 million in the coming year.

Share of government spending on ICT from its total expenditures has been of the descending order over the past four years — from 3.6% in the 2016-17 fiscal to 2.2% in March 2019-20).

The influential research organization points out that the budget bill is short on detail and transparency, adding that in many cases the government has not clarified its spending needs and direction as would be expected. It has called on the administration to address such key funding issues before its budget is ratified in the chamber.

Budgetary figures are subject to alterations depending on the lawmakers’ final debates who as per law must approve the budget bill before it becomes law.

(USD=116,000 rials).