Next Year's Targeted Subsidies Revenue 'Will Not Be Deposited in the Treasury'

A member of the Parliament's Program and Budget Commission stated that the revenue from targeted subsidies in 2018 will be 'at least 100 trillion tomans' and announced plans for 'not depositing it' into the national treasury. Hamidreza Hajibabaei made this statement on Wednesday (January 24) in an interview with the Fars News Agency and introduced the targeted subsidies section in next year's budget as having 'nine flaws.' According to this parliament member, the total revenue from targeted subsidies in 2016 was 87 trillion tomans, and it is predicted that 'considering current conditions, revenues in 2018 will be at least 100 trillion tomans.' Mr. Hajibabaei added that in the government's proposed budget for next year, this 100 trillion tomans is allocated to the 'Management and Planning Organization' and 'no payments have been made to the national treasury.' He did not provide further details and only mentioned this as one of the nine flaws he noted regarding the targeted subsidies section in the 2018 budget bill. Issues such as the absence of 'revenue and expenditure lines,' the exclusion of revenue from 'gas exports' in this section, incomplete references to revenue from 'product exports,' 'ambiguity' in targeted subsidies revenues and expenditures, 'allocation of 37 trillion tomans in the general budget,' and 'non-compliance with the sixth development plan' are also among the other flaws pointed out by Hajibabaei. He also urged members of the Islamic Consultative Assembly to pay attention to the existing flaws in the targeted subsidies section during the 'budget review and to correct the problems.' Previously, on December 25, Hadi Qavami, a member of the Parliament's Program and Budget Commission, stated in an interview with Fars News Agency that 'the revenues of the National Oil and Gas Company have not been deposited into the treasury and have gone into one of the banks, and profits are being received from this source.' He emphasized that '320 trillion tomans have been spent on cash subsidies for households in the targeted subsidies program, and all of it has been wasted, whereas these resources should have been converted into investment and the development of roads and infrastructure.' Hassan Rouhani, the President of Iran, submitted the 2018 budget bill to the Islamic Consultative Assembly in December of this year. The share of cash subsidies in the proposed budget has decreased by 19 trillion tomans, which the Tasnim news agency interpreted as meaning 'the removal of subsidies for more than 30 million people.' Adel Azar, the head of Iran's Court of Audit, also announced that according to the 2018 budget bill, subsidies for 30 million people will be removed. According to Mr. Azar, these 30 million people fall into 'the higher income brackets of society.' The head of the Court of Audit also promised that the revenue generated from this would be used to complete unfinished construction projects. When presenting the 2018 budget bill to Parliament, Hassan Rouhani announced the transformation of the Targeted Subsidies Organization into the Hope Welfare Fund and stated that new conditions for cash subsidies would be created. According to the law approved by Parliament, the implementation of the targeted subsidies law was supposed to be a five-year law and thus would have ended two years ago - in 2016 - but economic experts believe that due to political reasons and factional rivalries within the government, the payment of subsidies continued.