Achieving 8% economic growth requires an investment of 160 billion dollars per year
In an interview with the economic reporter of Fars News Agency, Hadi Qavami said about how the economic growth is predicted in the program bill and what measures should be taken to realize it, there are requirements for the realization of the five-year development plans, such as the realization of an 8 percent growth of the economy. or single-digit inflation of 9.5% at the end of the program and other objectives are necessary requirements that must be realized in practice, and annual budgets must comply with the program law in terms of quantity and quality.
* 1403 budget, the first cut of the 7th development plan
He said: If the seventh development plan bill is approved this year, it should be the 1403 budget bill based on the seventh plan and as the first annual cut of this five-year plan.
Qavami stated: In the process of approving the 7th plan bill, the parliament should measure what factors will achieve the 8% economic growth desired by the government and provide the basis for investment for this purpose. Because it is supposed to achieve 8% annual economic growth on average, although it may be 6% in one year and 12% in another year, but the average growth should be 8%.
* Economic stability and investment require 8% growth
In response to the question of how much investment is required for an 8% economic growth, Ferdowsi University economics professor said: first, economic stability and stability of laws and regulations are needed to achieve economic growth, secondly, domestic and foreign investment is needed for growth. 8% per year requires at least $60 billion in foreign investment plus the equivalent of $100 billion in domestic investment to achieve 8% growth.
* One third of growth will come from productivity
He said: Also, liquidity should be directed towards production, on the other hand, one-third of economic growth should come from productivity, including the productivity of human resources, capital, and all production factors.
According to Qavami, every political, financial, monetary and currency measure should be aimed at strengthening productivity and achieving economic growth, and should be removed if productivity decreases.
In explaining productivity, he said: economic growth is obtained from productivity by dividing productivity by costs, and the more productivity growth increases and costs decrease, the more growth will be achieved, and on the other hand, any action that reduces production costs, in the direction of It will increase productivity. Therefore, the parliament and the government should avoid spending money on the producer.
* The government should be committed to its policies
Regarding how employers can be expected to invest while some economic regulations do not have the necessary stability, this university professor said: the government must commit to its policies, because we have two types of policies, some policies are expedient and some are binding, which must be There should be more committed policies and the government should honestly announce that, for example, the price of feed is a single digit per year and remain committed to the same figure, and the economic activist should trust the government that if this policy is implemented, as a result, both production will increase and inflation and unemployment will decrease. But when the policy is based on expediency, a rate is announced, but that rate rises in the middle of the year, so the economic activist understands in his contracts that usually the figure announced by the government as target inflation is more than the actual one. As a result, it can predict the number of its contracts with a higher level, which also fuels the expected inflation.
Elaborating on this point, he said: For example, when the government says that we want inflation to be 20% this year, but because the private sector has not seen a good record of the government’s promises, the private sector feels that the government does not stick to its commitment. In its contracts, inflation is expected to be 30 or 40%, and this will fuel inflationary expectations and be an obstacle to investment.
He said: Stability in procedures and regulations is also very important. An economic activist must be able to predict the future of the economy and make a contract with the other parties.
* The production path will be smooth and the brokerage path will be expensive
In response to the question, the former Deputy Minister of Economic Affairs and Finance said that how can the employer be expected to invest in the economy in a situation where the yield of money in parallel markets such as currency, coins, gold or land and property is higher due to inflation. : In order to support production, the government should make activities that compete with production such as brokering and intermediation expensive and raise the cost of speculation with tools such as capital gain tax. and create bumpy mediation instead of paving the way for producers and entrepreneurs and providing support to entrepreneurs.
Stating how the government can provide effective support to the producer, Qavami said: For example, when we say that the profit tax will be reduced from 25% to 20%, it will make the production path less expensive, and instead, the brokerage path should be expensive. Now the question is why people ask to buy houses, cars or coins and currency because of having income. Now if the government intelligently takes the major share of this income with capital gains tax, then the path of brokerage will be closed. For example, the government can make a law that if someone buys a property, he is not allowed to buy and sell it for 5 years, or if he buys a car, he does not have the right to sell it for 3 years, these are tools to close the way of speculation and brokerage, instead, if someone builds a factory, with an exemption or The tax rate will be reduced or if someone exports and earns foreign exchange, he can import machinery with low customs duties.
* Encouraging the export of tourism services and foreign exchange
This professor of economics said: In order to support the export of services, the government can tell the hotel and tourism industry that if someone attracts foreign tourists and earns foreign currency, we will not require him to sell it at half the rate of 28,500 tomans, but he can sell it at the free rate in the market. This issue creates a prospect of increasing the supply of currency in the market and its rate in the market will decrease regularly. With this policy, the profit will be more for the hoteliers and the exchange rate will decrease in the market.
He also said: In order to encourage hoteliers, it can be announced that whatever amount of foreign tourists they attract will be exempted from value added tax and this will be an incentive for the growth of service exports.
According to Qavami, foreign tourists in every country pay at least 100 dollars for a double room, but in Iran, because the value of the dollar has decreased, they pay less, so Iranian hotels are cheaper for foreigners, and in this way, more foreign tourists can be attracted. did Now that next year’s budget bill has to be drafted, for example, it can be set as a goal that 2 billion dollars should be obtained from tourism in 1403.
* Contradiction of the policy of increasing tax revenue with unlimited exemptions
In response to the question that on the one hand, the parliament says that the government should be governed by taxes, on the other hand, it imposes regular tax exemptions for the government to support production and investment, how can this contradiction be reconciled, the former parliament member said: The important point is that The parliament does not exempt all economic actors from taxes, but wants production to be low-cost. On the other hand, if inflation decreases, the cost of the government to do things will also decrease, and that part that will be exempted from taxes, it is true that the tax income for the government will decrease. But on the other hand, production is booming, and with the increase in production, more tax revenue can be obtained for the government, so the financial burden of the government is also compensated.
He said: When inflation decreases, the financial cost of the government will also decrease. On the one hand, brokering and mediation activities should become costly and risky, and a heavy tax should be imposed on brokering. Therefore, on the other hand, the tax on speculation should be increased, but the production tax rate should be reduced. increase the amount of tax revenue from the place of production growth. If the tax on corporate profits is 25%, a company with sales of 100 billion must pay 25 billion in tax, but if there is a space for sales to increase and instead of 100 billion profit, a thousand billion profit is obtained. Come on, at that time, instead of 25 billion dollars, 25 billion tomans of income with a rate of 20% can get 200 billion tomans of tax revenue for the government, so the meaning of tax exemption is not a complete exemption, but a reduction of the tax rate in order to support production and reduce The cost of production and vice versa is an increase in brokerage cost.
* The tax share of GDP should increase from 5% to 10%
In response to the question of what is the ratio of taxes to the GDP of the country and to what figure should this ratio be increased in the 7th plan, Qavami said: It depends on how much the GDP is, if we consider it equal to 500 billion dollars. And if each dollar is calculated as 50 thousand tomans, the gross output will be equal to 25 thousand hemats, and if the total tax and customs revenue this year is 860 hemats, the ratio of taxes to the gross domestic product will be equal to about 3.5%, but if we also add social security incomes. The share of taxes and social security in the gross domestic product will be around 6%, while in the world this share is 20-30% and in some countries it reaches 40%.
He said: In the 7th development plan, the share of taxes in the country’s gross product is supposed to increase to 10 percent.
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