Tehran Mayor Submits Next Budget

EghtesadOnline: Tehran Mayor Pirouz Hanachi submitted the budget for the next fiscal year (March 2020-21) to the capital city’s Islamic City Council on Sunday.

News ID: ۷۴۹۶۱۴

04 February 2020

“The ceiling set for next year’s budget is 302 trillion rials ($2.25 billion), which is 24.9% more compared to the current year’s budget,” he was quoted as saying by ISNA.

According to the mayor, the municipality's overall resources and revenues are projected to stand at 150 trillion rials ($1.11 billion), indicating a 40% increase compared with the current year’s budget, Financial Tribune reported.

A total of 48.25 trillion rials ($360.07 million) have been projected to be gained from value added tax next year. The figure marks a 38% growth compared with the current fiscal budget, thanks to recent passage of two bills namely “Municipalities’ Sustainable Revenues” and “Value Added Tax” in the Iranian Parliament.

These two pieces of legislation, however, have yet to be approved by the 12-member Guardians Council, which vets the legislation’s consistency with the constitution and Islamic laws.

Tax and duties on real estate construction and sales worth nearly 120 trillion rials ($895.52 million) will be the other source of income for TM next year, which shows an 8% rise over the current year’s budget, the Persian-language economic newspaper Donya-e-Eqtesad reported.

“On the side of expenditure, an average of 43% rise is expected to set it at 143.31 trillion rials ($1.06 billion) compared with the current year’s budget. Next year’s earnings are 40% more than spending, indicating a positive account balance for Tehran Municipality,” Hanachi said.

“Capital expenditure projected for next year has increased by 43% compared with the current year’s budget. A total of 44.72 trillion rials ($333.73 million) will be allocated for repayment of municipal debts and liabilities.”

The value of investment projects on transportation and traffic is projected to increase by 46% to hit 87.66 trillion rials ($654.17 million), of which 34.2 trillion rials ($255.22 million) will be spent on subway development. A total of 109 projects worth 103 trillion rials ($768.65 million) have been defined in the budget bill to rebuild and renovate Tehran districts.

Municipal services related to the maintenance of the capital city are predicted to cost 48.27 trillion rials ($360.22 million) next year, indicating a 58% growth compared with the current year’s budget. Likewise, emoluments expenditure has increased by 34% to stand at 48.31 trillion rials ($360.52 million) next year. According to the remarks made by the mayor, municipal employees will see a 25% rise in their salaries next year.

“Capital expenditure accounts for 47% of next year’s budget, operating budget 38% and bonds purchases will constitute 15% of the city’s budget next year,” he concluded.

According to TCC Chairman Mohsen Hashemi, the members of Tehran City Council will review the budget bill in the first week of the last Iranian month (Feb. 20-26).

After winning the capital city’s mayoral race in late 2018, Hanachi set out the policy to levy proportional public charges for the services offered by the municipality, including duties on renovation of real estates and commercial properties.

He believes that the main challenge facing the city management is the small share of sustainable revenues in the budget and that by diversifying the municipality resources, which are now limited to revenues from value added tax, it is possible to increase the share of sustainable incomes.

“The creation of an integrated urban management to advance Tehran's affairs” was another topic on the mayor's agenda.

“Information transparency will be the centerpiece of the capital city’s new ordinance,” he added, noting that future studies carried out by the municipality will be made available to the public in their entirety.

All stages of securing construction permits will be conducted online, he added.

Hanachi further said all considerations, the negative and positive effects of urban projects in short-, medium- and long-terms will be fleshed out for people under the tag of “Future Appendix”.

In 2017, the municipality unveiled a first-of-its-kind website, Shafaf.tehran.ir, which offered viewers a full overview of its major contracts—those worth over 10 billion rials ($74,626) and the details of the city’s current fiscal spending package.

Later, it offered specifics of all its contracts worth over 2.5 billion rials ($18,565). The website also features information on municipality’s executives, including their education and experience, university degrees, alma mater, their previous position and the type of their employment contracts.