Commission Approves Fiscal 2022-23 Budget Bill Outlines

EghtesadOnline: The Joint Commission of the Iranian Parliament has passed the outlines of the upcoming fiscal year’s budget bill, giving its approval in principle to figures provided by the government of President Ebrahim Raisi.

News ID: ۷۸۷۵۷۹

08 January 2022

The commission is responsible for reviewing the budget bill as well as five-year development plans proposed by the government before it is put to a legislative vote.

Hossein Bamiri, a member of the commission, told IRNA that 21 members voted for and 19 against the approval in a Tuesday evening meeting.

The outlines of the bill will now be put to a vote in an open parliamentary session on Sunday.

The bill needs the final approval of the Guardians Council before it becomes law.

Raisi had submitted the fiscal 2022-23 budget bill to the parliament on Dec. 12.

In the next fiscal year (starting March 21, 2022), the operating budget (including revenues derived mainly from taxation and exports at the disposal of the government) has been projected to stand at 13,720 trillion rials ($45.73 billion at the market exchange rate of 300,000 rials per dollar).

Add to this, revenues earmarked for ministries and governmental institutions worth 1,332 trillion rials ($4.44 billion), which takes the total sum of the general budget to 15,052 trillion rials ($50.17 billion).

The budget of state companies, banks and for-profit organizations has been put at 22,314 trillion rials ($74.38 billion).

All in all, the ceiling set for the government’s total budget is 36,310 trillion rials ($121 billion).

The budget expects crude oil sales to stand at 1.2 million barrels per day to earn 3,818 trillion rials ($12.66 billion) in the fiscal 2022-23, accounting for about a quarter of the general budget.

It has allocated up to €4.5 billion of the oil sales to bolster Iran’s defense capabilities, Fars News Agency reported.

The share of tax revenues in the general budget is at 5,270 trillion rials ($17.5 billion).

Notably, for the first time, the budget counts on taxing all owners of cars valued over 10 billion rials ($33,333) as well as owners of homes valued over 100 billion rials ($333,333).

The parliament will go through the details of the budget bill to make any necessary changes before it is passed into law.

Vienna Nuclear Talks

The Plan and Budget Organization says the next fiscal budget has been drafted regardless of the outcome of talks in Vienna where Iran and the world powers party to the 2015 nuclear deal (known as the Joint Comprehensive Plan of Action) are negotiating to resuscitate the agreement that was abandoned by the US in 2018.

Iran's top negotiator said on Wednesday the ongoing nuclear talks are focused on the removal of US sanctions on the Islamic Republic.

Ali Bagheri-Kani made the remarks before entering Palais Coburg, the hotel where the negotiations on restoring the 2015 nuclear deal, are being held.

He noted that efforts are underway to achieve a result during the eighth round of talks.

Bagheri-Kani noted that the effective removal of US sanctions on Iran is key to arriving at an agreement.

“The more seriousness the other sides demonstrate for removing the sanctions, the sooner it will be possible to reach an agreement. That can be achieved if they accept Iran-proposed mechanisms for lifting the sanctions, particularly regarding the verification and guarantee issues,” he added.

Iran wants to be able to verify the removal of the sanctions and a guarantee that the US won't withdraw from the deal again.

Iran and the five other remaining signatories to JCPOA – China, Russia, Britain, France and Germany – have held several rounds of talks in Vienna to revive the deal.

The US, which is not a direct participant in the talks and communicates indirectly with Iran, said on Tuesday that the talks had shown modest progress and it hopes to build on that this week.

The statement signaled a change in tone after Washington expressed reservations about the constructiveness of Iran's approach.

Government officials, particularly the head of Plan and Budget Organization, Masoud Mirkazemi, have stressed that next year’s budget has been drafted without a deficit.

Yet, Iranian governments have had a streak of failing to meet the revenues and expenses in the budget year over year.

PBO has seemingly tried to draw up the budget based on economic realities but it has not paid attention to the point that the current year’s budget is on course to run a 4,000-trillion-rial [$13.3 billion] deficit although it had envisioned the sales of 2.3 million barrels of oil per day at a price of $50 per barrel. Since oil revenues have decreased by 40-50%, the realization of a budget without deficit for next year is uncertain, the Persian daily Arman-e Melli reported.

Hadi Haqshenas, an economic expert, said one of the reasons behind the budget deficit of the last and current Iranian years is that our projected oil revenues did not materialize.

“Any figure announced as the current year’s budget deficit will be in the area of 3,000 to 5,000 trillion rials [$10-16.5 billion]; next year’s budget deficit will be 50% more than that figure, of course, assuming that the nuclear talks fail and we won’t be able to sell oil,” he said.