Iran’s Draft Budget for Next Year Signals Increased Pressure on the Population

iran parliament majlis raisi budget 2023 qalibaf
Written by
Mansoureh Galestan

Iran’s regime has released the draft budget for the fiscal year 1403 (March 2024- March 2025), marking an 18.2% increase in the general government budget, managing the country’s affairs with a total of 2,642 billion tomans.

The primary sources of this budget include taxes, oil sales, government property sales, bond sales, and company divestments. Notably, the most significant income source is from taxes. For the upcoming year, the regime anticipates a tax revenue of 1,122 billion tomans, indicating a 50% increase compared to the current year’s 749 billion tomans.

The regime aims to offset this substantial tax increase by levying it on ordinary citizens. According to regime financial institutions, over 95% of the tax revenue, totaling more than 711 billion tomans has been collected from the start of the current year.

While the tax revenue for the current year has seen a 65% increase from 454 billion tomans to 749 billion tomans from last year, this additional burden on the people, especially in the production sector, has coincided with economic recession and inflation. Governments typically reduce taxes during financial downturns, but Iran’s regime is doing the opposite, increasing taxes by 50%.

In contrast, despite an official inflation rate hovering around 50%, Ebrahim Raisi’s government plans to raise the minimum wage only by 18 to 20%. This widening gap between wages and household expenses will further reduce people’s purchasing power.

Considering the minimum wage is approximately 10 million tomans, the regime intends to tax people with incomes exceeding 10 million tomans. With the poverty line around 30 million tomans, this move aims to officially impoverish the majority of Iran’s society further, ensuring the regime has the necessary resources for its projects and ambitions.

Given the regime’s official statistics indicating a persistent 40-50% inflation rate, which is likely higher in reality, taxes effectively act as a form of inflation tax. This reality is evident in examples such as the exorbitant prices of cars in Iran compared to other countries.

Watch and judge how #EbrahimRaisi wants to compensate for the #Iranian regime's budget deficit pic.twitter.com/smAnIYCTnE

— NCRI-FAC (@iran_policy) March 2, 2023

For instance, a 2017 Kia Optima in Iran costs over 3 billion Tomans, while the same car sells for a price equaling 300- 400 million tomans in the United Arab Emirates.

The 2011 Toyota Aurion is currently priced at 4 billion tomans in Iran. Meanwhile, the same car in Dubai has price ranges of 250 to 300 million, calculated in Emirati dirhams equivalent to 14,000 tomans. This means that the car in Iran is 16 times more expensive than in Dubai.

As for the 2017 Benz E200, its current price in Iran exceeds 10.5 billion tomans. The same car in Dubai is priced at 900 million tomans. In other words, in Iran, it is nearly 12 times more expensive than in Dubai.

This pattern broadly applies to other goods and commodities as well. It can be inferred that the Iranian regime, leveraging high inflation, has inflated the prices of cars, compelling people to use domestically produced vehicles. Due to the lack of adherence to standards, these domestically produced vehicles are considered highly hazardous. Additionally, due to the high accident rates on roads, Iranian domestically manufactured cars are colloquially referred to as “death wagons.”

In his speech, Raisi didn’t refer to how the budget’s lion’s share goes to the regime’s security apparatus and institutions under the supreme leader’s supervision, which are also exempt from taxes. #IranRevolution2023 https://t.co/8oXwafYWUl

— NCRI-FAC (@iran_policy) January 26, 2023

It’s clear that these taxes are extortionate, as financial entities associated with the Islamic Revolutionary Guard Corps, which controls 60% of the country’s capital, are entirely exempt from taxation. Similarly, financial empires like Astan Quds Razavi, as well as other financial institutions affiliated with Supreme Leader Ali Khamenei, also enjoy complete tax immunity. These tax extortions from the people, in a society on the verge of explosion, can be a catalyst for further grassroots uprisings.

Moreover, in the current year, the regime’s forecast for oil income was 604 billion tomans. However, for 1403, they have reduced this figure to 585 billion tomans, indicating that the regime’s claims about record-high oil sales and the return of funds are mostly for promotional purposes. The Raisi government acknowledges that next year’s oil revenues will be even less.

In summary, the draft budget for the next fiscal year suggests that the Iranian regime is intensifying its financial burden on the population, relying heavily on increased taxes to fund its projects while facing economic challenges like recession and high inflation.

Iran’s Draft Budget for Next Year Signals Increased Pressure on the Population