The economic landscape of Iran in 2024 is fraught with a multitude of challenges, encompassing a budget deficit, incongruities between budget allocations and program implementation, inflationary shocks, and the anticipation of tax hikes.
A thorough analysis of Iran’s economic predicament, particularly the 2024 budget, by Etemad newspaper sheds light on the potential exacerbation of poverty among the Iranian populace in the coming year.
As delineated in the report, factors contributing to this economic strain include inflationary shocks surpassing 50%, tax burdens imposed across various business sectors, income tax, and levies on employee salaries, housing, and automobiles.
Concurrently, a financial management crisis concerning subsidized goods in the citizens’ livelihood basket looms large, further exacerbating the economic woes of the Iranian people in the approaching year.
The report reveals that public resources in the government’s budget for the next year have surged by 16.7% to reach 2,429 trillion tomans, while sustainable incomes have seen a considerable uptick of 41.9% to 1,495 trillion tomans.
In contrast, oil sales have witnessed a 16% decrease in the 2024 budget bill compared to the preceding year’s bill.
Etemad’s investigation suggests that even in the most optimistic scenario, factoring in a 50% inflation rate, a 20% salary increase, and a tax surge of over 50%, the citizens’ living standards may plummet by an additional 30% in the coming year.
The head of the Program and Budget Organization underscores the potential impact of a one percent increase in value-added tax, positing a 0.6% inflation uptick.
Tax revenues, forecasted to burgeon by 49.8% to 1,122 trillion tomans, constitute the largest share in the next year’s budget and the government’s sustainable revenue sector.
Parliamentary objections to the budget bill spotlight concerns over the impending nearly 50% tax hike and its potential repercussions on production and livelihoods.
Additional worries include a 36% escalation in bond sales, representing an unstable source of revenue, inadequate resources for aligning and proportioning pensioners’ rights, and the ominous specter of a budget deficit.
However, the contours of the economic landscape are not unanimously bleak. Divergent opinions within the regime’s expert community challenge the official stance, positing that the inflation resulting from the proposed tax increase might surpass the government’s projected figures.
The financial blueprint for the next year is poised to exert profound implications across diverse economic sectors, with the housing sector, currently grappling with an inflationary recession, anticipated to face new challenges.
Etemad newspaper, while acknowledging the government’s aim to boost tax revenues with a 50% annual growth, cautions against potential pitfalls arising from changes and inadequacies in tax exemptions for goods and services intended to stimulate economic projects.
Moreover, the ability of citizens and economic enterprises to withstand and adhere to the government’s tax policies is questioned, with the prospect of imposing heavier taxes adding an extra burden on the populace.
Despite these economic quandaries, regime institutions appear resolute to embark on the coming year with augmented budgets, partially fueled by the official sanction permitting military and government entities to engage in oil sales in the 2024 budget.
This strategic move, aimed at circumventing U.S. sanctions, is anticipated to generate substantial unofficial revenues. Notably, the General Staff of the Armed Forces is granted permission to sell crude oil and gas condensate, constituting 21% of the nation’s total oil exports.
However, concerns linger over the increasing financial autonomy of the Islamic Revolutionary Guard Corps (IRGC), evolving into a parallel government with the authority to sell oil. This development raises questions about accountability and tax contributions.
Meanwhile, individuals affiliated with the regime, some of whom have faced scrutiny for alleged corruption, continue to draw from Iran’s public budget without contributing taxes, exacerbating the stark contrast between the privileged and the population condemned to a projected 30% reduction in their standard of living in the upcoming year.
