The Iranian regime’s Minister of Economic Affairs and Finance, Ehsan Khandouzi, recently announced that the government’s tax revenues have reached 8,000 trillion rials, equivalent to $13.5 billion.
This achievement marks a historic high for the country’s tax administration, with revenue collections reaching 108% of the approved amount for 2022.
While Khandouzi did not specify the annual growth rate of tax revenues, he highlighted that the previous year’s tax revenues were 4,700 trillion rials, indicating significant growth.
Oil exports remain a primary source of income for Iran’s budget, despite ongoing U.S. sanctions.
Tehran currently sells approximately 1.3 million barrels of oil per day to China, though the exact cash returns are unclear due to these international sanctions. Since 2023, the regime has intensified efforts to increase tax revenues and improve collection rates.
Over the past three years, Iran’s budget tax revenues have surged by over 162%. For the current fiscal year, the government aims to collect more than 13,000 trillion rials in tax revenue, representing a 62% increase from the previous fiscal year.
This goal reflects a 326% increase in tax revenues since 2021. Consequently, the share of tax revenues in the government budget has risen from 25% to 53% during this period.
This dramatic increase in tax revenues has occurred during President Ebrahim Raisi’s tenure, from June 2021 to April 2024. However, this period has also seen a rise in poverty among Iranian citizens.
According to the Food and Agriculture Organization of the United Nations (FAO), per capita meat consumption in Iran decreased by one-third between 2020 and 2023.
In the 2023 budget bill, the government doubled the amount of tax revenue compared to oil income, causing significant public dissatisfaction and criticism.
Last December, the state-run newspaper Ettela’at criticized the government’s tax policy, noting that while taxes increased by 50% in the 2024 budget, salaries saw only an 18% increase.
Before the U.S. sanctions in 2018, approximately 40% of Iran’s budget depended on oil revenues. This percentage has dropped to 21% due to the sanctions.
The Iranian regime projects total domestic and export oil and gas revenues at 6,414 trillion rials for the current budget, about half of the tax revenues or approximately $11 billion at the current exchange rate.
Officially, less than 50% of the government budget comes from oil export revenues, with 14.5% allocated to the National Iranian Oil Company, 2.5% to deprived areas, and the rest to the National Development Fund.
A significant portion of oil revenues is directed towards the regime’s Revolutionary Guards (IRGC) and other repressive apparatuses.
Around 21% of Iran’s total oil exports are controlled by military institutions, equating to the sale of 104 million barrels of oil.
The IRGC has increasingly wielded power over the government, functioning as a parallel entity with the right to sell oil.
Companies operating in Iran’s oil and gas sector are predominantly owned by regime officials, their relatives, and entities affiliated with military and security institutions.
Consequently, these institutions benefit not only from direct oil sales but also from brokerage fees and transportation costs.
The IRGC’s budget has continued to increase in recent years, reaching one-fifth of oil revenues in 2023.
Additionally, the government has used the National Development Fund’s share of oil revenues to mitigate budget deficits.
Despite these measures, the government budget still faces a 30% deficit annually, as oil revenues remain significantly lower than in the pre-sanctions era.
While OPEC has yet to publish its 2023 annual report, Iran’s customs statistics indicate that the country’s oil export income for the last financial year was $37 billion.
The actual cash income from crude oil exports to China remains undisclosed. Part of the regime’s export earnings is held in China to cover the costs of importing goods to Iran.
Inflation is another factor contributing to the rise in tax revenues. According to the International Monetary Fund, Iran’s annual inflation rate has averaged 42% since 2020.
Considering this inflation rate, the Iranian government’s tax increase should have been capped at 160%, rather than the 326% achieved.
