The burden of government tax revenues in 1401 on the private sector / Development of bilateral relations in the region and Iran’s neglect

According to Fars News Agency, Gholamhossein Shafei addressed the 19th meeting of the Board of Representatives of the Iranian Chamber of Commerce today, referring to the shortcomings of the 1401 budget bill, resolving political disputes in line with economic priorities in the region.

The full text of the speech of the Chairman of the Iranian Chamber in the 19th meeting of the Board of Representatives of the Iranian Chamber is as follows.

A: Budget Bill 1401

An important issue that currently concerns all politicians and economic activists and various strata is the 1401 budget bill. Increasing sensitivities to the annual budget and the reaction of different sections of society to the budget bill is inherently beneficial. Because the budget document is not just a simple accounting and financial document for government revenues and expenditures, but also reflects the relationship and how the government and the nation interact for at least the next year. From this point of view and in the position of representatives of economic actors, when we look at the budget, a few points can be mentioned:

* Private sector absent from the 1401 budgeting process

First, the private sector has been completely absent from the 1401 budget process. Unlike in previous years, when the private sector was formally invited to agree by the budget staff, this year it has three chambers.گانه No invitations were made and the private sector was completely ignored in the process.

The second aspect is that for the first time in the way the budget was written, the phrase “private sector” was not used even once. Unlike previous years, when at least the term public-private partnership was used, this year it has been removed and no name has been taken from the private sector. Instead, they have used the term non-governmental, which has a semantic and legal meaning. This replacement of the term non-governmental with public-private partnership has far-reaching economic and political implications.

The third aspect is the structure of revenue generation and specifically the discussion of taxes in the budget Is coming backد گردد. In the budget bill drafted by the government, we see that The tax on non-governmental companies has been estimated at 112.1 thousand billion tomans with a growth of 146 percent. In contrast, for state-owned companies, with a growth of only 83% compared to the previous year, the amount of 7.5 thousand billion tomans has been targeted.

In addition, 70% growth is projected for VAT, which directly affects people and businesses. These figures show that the main burden of government tax revenues next year will fall on the private sector. In addition to this increase in pressure on the private sector, we see that in various sections of the budget, the policy of eliminating existing tax exemptions is on the agenda, which in another way increases the pressure on private sector actors.

It should be noted that the immediate elimination of tax exemptions provided for in upstream laws, such as export tax exemptions during the annual budget laws, will lead to a wide-ranging change in the planning of enterprises operating in the private sector and a reduction in economic predictability. This, in turn, increases the cost of financing productive manufacturing and commercial activities by increasing investment risk. In fact, the question remains whether the government’s long-term legal obligations can be ignored through the annual budget. With the current method, what confidence should be given to other promises and appointments of the government ?!

The fourth aspect is the issue of how to use oil and gas resources باز می‌To be. While the government has deposited significant resources in the oil revenues line by increasing the exchange rate, the calculation basis of the budget is 23,000 Tomans, it has still borrowed half of the resources that should have been deposited in the National Development Fund to balance its resources and expenditures. Meanwhile, the resources of the National Development Fund were to be invested in the country, especially through the private sector. Even if the government’s response is that these resources are to be invested, the question remains as to whether the use of these resources in economic projects is justified or in the myriad government projects, many of which have no economic justification.

In view of these points, I request the members of parliament, especially the members of the Joint Commission, to take the necessary care in reviewing the bill in order to reduce its negative consequences. Otherwise, next year will be a very difficult year for society and the private sector.

The fifth aspect of the discussion is policy coordination. While we acknowledge that eliminating the 4,200 toman currency is the right thing to do, we believe that we need to adopt coordinated policies when doing such a big project. In recent weeks, parliament has waived a tax exemption on imports of non-domestically produced machinery while considering a plan to leap in knowledge-based production. Naturally, in a situation where the growth rate of investment has been negative in the past few years, this decision will worsen the situation of production capacity in the country and increase the cost of goods. Last year, the Iran Chamber of Commerce announced its opposition to the plan to the decision-making authorities.

* Unity of economic command is necessary for economic reforms

In principle, it seems that the unity of economic command that is necessary for economic reform in the government needs to be strengthened. Otherwise, these scattered decisions will hit the production sector in the country and the stagflation will be the result.

B: Resolving political disputes in line with economic priorities in the region

Today, we see that in the international arena, one of the most thought-provoking issues is the efforts of the countries in the region to resolve political disputes in line with economic priorities. The Turkish president recently announced that he would travel to Saudi Arabia in February 2022 to resolve trade issues between the two countries. The UAE Crown Prince’s recent visit to Turkey is also an important sign of the two countries’ desire to improve relations. Historically, politics has played a dominant role in shaping the path of economic relations between the two countries. To the extent that the Arab Spring storm disrupted the normal trade of the two countries. But in the current situation, the two countries have well understood the need to resolve differences in order to improve economic relations. In a similar move, Armenia lifted a ban on imports from Turkey. The ban follows the recent Nagorno-Karabakh war and Turkish support for Azerbaijan.

It seems that the countries of the region are reducing their political conflicts by giving priority to solving economic problems. This can be a valuable lesson for domestic policymakers to realize that in today’s world, economic growth and development in a country is so important that it affects and shapes political relations accordingly. In fact, politics is in the service of economics, not economics in the service of politics.

A: The growing trend of developing bilateral trade relations in the region and Iran’s neglect

The importance of developments in Iran’s peripheral economies in terms of the sheer volume of trade agreements and the development of bilateral trade relations. The UAE should be considered the leader of trade agreements. Agreement to start free trade negotiations with Georgia, efforts to establish a free trade zone with the Eurasian Economic Union and negotiations on so-called “comprehensive economic partnership” agreements with eight countries India, Britain, Turkey, South Korea, Ethiopia, Indonesia, Kenya and some countries Other importantMost This is the country’s efforts in this area.

India has also put on the agenda the rapid advancement of free trade agreement negotiations with a range of countries. In addition to the Free Trade Agreement with the UAE, a working group has been set up to negotiate a free trade agreement with the Gulf Cooperation Council. At the same time, India has taken preliminary steps to get startedوگوهای Similar to Britain, Australia, the United States and Canada are on the agenda.

In this regard, it should be noted that Turkey in recent years has made great efforts to expand its presence and trade influence in the surrounding countries and beyond. Turkey and Azerbaijan have set an ambitious goal of increasing trade relations to $ 15 billion by 2023. Turkey is the second largest foreign investor in Azerbaijan after Britain. It also aims to increase its trade with African countries to $ 75 billion by 2023, and seeks to expand the presence and influence of Turkish goods and companies on the continent by meeting the security needs of African countries. The efforts of this country to take over some infrastructure projects in Iraq should be considered in the same direction.

The reopening of the Free Trade Zone between Syria and Jordan and the signing of 27 memoranda of understanding on economic cooperation between Saudi Arabia and France and 13 memoranda of understanding worth $ 30 billion between Saudi Arabia and Oman are other clear signs of this approach among the countries in the region.

The governments of the region have ambitious goals to increase the volume of their foreign trade and have taken growing measures in this regard. In fact, they have found that looking outward is one of the requirements for export growth. But it should also be noted that the need to properly advance this policy is to solve the internal problems of the economy and strengthen domestic production. In addition, looking out and using the capacity of regional markets should be on the agenda. If the current trend does not change and we do not change our view and do not think about the country’s economic relations in the long run, our country will become more isolated and will miss potential opportunities.

One case of preferential trade agreement with Turkey was concluded. All economic activists believe that this agreement is the economic Turkmenchay of Iran. That is, only our art eventually came to this conclusion. The Iran Chamber conducted a thorough investigation into preferential trade with Turkey and sent it to the authorities. But despite many follow-ups, we were not given any answer about it. In any case, in these new political developments, we must wake up to save our economy and spend a little bit of politics on the economy.

end of Message/