Central Bank Report: About 26% of Government Revenues Unachieved

Reports from the Central Bank of Iran regarding the government's public budget in the first four months of 2016 indicate that the total government revenue during this period reached 39,750 billion tomans. This figure shows that the government faced a 25.6% shortfall in projected revenues during this timeframe. According to the Central Bank's report on government financial performance, tax revenues in these four months were more than three times the government's revenues from oil sales. By the end of July this year, Iran's tax revenues amounted to 29.7 thousand billion tomans, while the government earned 10.5 thousand billion tomans from oil and petroleum products during the same four-month period. The report indicates that tax revenues in the first four months of this year increased by about 27% compared to the same period last year. However, the government's oil revenues in the first four months of this year experienced a 25% decrease compared to the same period last year. The reason for the decline in government oil revenues in the first four months of this year can be traced to falling oil prices in international markets. According to the Central Bank's report on government financial performance, while tax revenues grew by 27% to 29.7 thousand billion tomans by the end of July this year, the approved tax revenue for this period was 35.2 thousand billion tomans, indicating that the government also faced a shortfall in tax revenues during these four months. The realization of approved tax revenues by the end of July this year reached about 85%. The report states that revenue from oil sales and petroleum products in the first four months of this year dropped by 25% compared to the same period last year, falling from 14 thousand billion tomans in 2015 to 10.5 thousand billion tomans in 2016. Comparing oil revenues in the first four months of this year to the same period two years ago also shows a decline of over 51% in government oil revenues. By the end of July 2013, the government had managed to earn 21.5 thousand billion tomans from oil and other petroleum products. By comparing government revenues and expenditures in the first four months of this year, it can be inferred that the government's operational balance during this period may have a deficit of 22,350 billion tomans. Compensating for the government's budget deficit by not allocating budgets for construction projects and leaving these projects pending could exacerbate the existing recession in Iran's economy. Another way to compensate for the budget deficit, which was emphasized by officials during Mahmoud Ahmadinejad's presidency and halted during Hassan Rouhani's administration, is borrowing from the Central Bank and printing strong money, which resulted in unprecedented inflation in previous years. The best way to compensate for the government's budget deficit is to reduce current government expenditures, which is typically impossible in Iran's economy. A significant portion of the government's current expenditures is due to the large size of the government in Iran and the high number of government employees, with a large share of these current expenditures allocated to paying salaries and wages of these employees.