Majlis Will Not Tax CBI

EghtesadOnline: Lawmakers on Monday put on hold a decision to tax the foreign exchange revenues of the Central Bank of Iran after the CBI governor asked them to rethink the move.

News ID: ۷۴۶۵۷۳

28 January 2019

Lawmakers wanted to amend a measure to tax the CBI in the next budget, but agreed to send the proposal to the Budget and Plan Commission for further review after  the CBI boss Abdolnasser Hemmati argued against it.

According the parliamentary news website ICANA, Hemmati told lawmakers that if the measure, which obliges the CBI to pay as much as 186 trillion rials in  taxes, becomes law the CBI will have to be taxed for "unrealized profit."

"Enforcing the measure will certainly cause the monetary base and liquidity to grow by 6-7%," Hemmati said, adding that the CBI has had a poor forex performance so far this year, according to Financial Tribune.

The government has launched an initiative to reduce dependence on oil export revenue to meet targets enshrined in the 'Resistance Economy' proposed by the Leader Ayatollah Seyyed Ali Khamenei. An important component of the long-term vision is to significantly raise income tax.

Lawmakers believe that the initiative should involve putting an end to a variety of controversial tax exemptions undertaken by successive governments.

According to the Majlis Research Center, in the 2019-20 budget bill the government has proposed 1,536 trillion rials in tax income – up 8% compared to this year's budget.

With regard to inflationary pressures forecast in the next fiscal (already hovering near 40% ), and the conspicuous downturn in the economy, the MRC says  the government is likely to be 69 trillion rials  shy in tax revenues

To help stabilize the foreign exchange market the CBI has tried to manage its currency allocations to different sectors and has prioritized basic goods.

Earlier this month Hemmati said “hard currency earnings have improved and US anti-Iran efforts to politically and economically corner Iran” is as an exercise in futility.