The Seventh Plan Bill assigned the determination of the government’s share of oil revenues to the annual budgets

According to the economic correspondent of Fars News Agency, the National Development Fund was established in the form of the fifth development plan, and according to this five-year plan, the share of this fund in the income from oil and gas exports was 20% in the first year of the plan, and three percent every year during the plan. It was added to this share.

In September of 2012, the balance of the National Development Fund was 50 billion dollars. In the Law of the Sixth Development Plan, the framework of the Fifth Plan was almost repeated, so that three percent of the National Development Fund’s share of oil and gas income should be added annually, but in practice, in the Tadbir and Omid government (from Shahrivar 92 to Shahrivar 1400), the government He reduced the contribution to the National Development Fund to 20% and in practice withdrew from this fund many times.

Some time ago, the draft bill of the 7th Development Plan was published, which showed that the Program and Budget Organization has a different proposal. In paragraph “d” of article 24 of this draft, it was stated: “All the resources obtained from the export of crude oil, gas condensate and net gas export, after deducting the share of the National Oil Company, will be deposited into the account of the National Development Fund at the Central Bank of the Islamic Republic of Iran.” The fund is obliged to manage its resources and expenses in such a way that it provides the government with a fixed amount of 25 billion euros annually in the form of one-twelfth. Deposit the entire country’s treasury account.”

Based on this, whatever the amount of oil and gas export income was, the government’s share was only 25 billion dollars, and there would be no change in the government’s share of these revenues. The positive feature of this proposal was that if the oil and gas income increased significantly, the government could not increase its expenses accordingly, but this income would go to the National Development Fund and be used for the development of the country. The weak point of this proposal was the reduction of the share of the National Development Fund from the revenues from the sale of natural resources in the conditions of lower oil prices and lower revenues. For example, if the country’s oil revenues were equal to 25 billion dollars for any reason, all the revenues should be transferred to the government account and the fund’s share of these revenues would be zero.

In any case, this proposal was removed from the final bill of the 7th Development Plan, which was sent to the Islamic Council by the President some time ago. The government’s proposal to use the regulation of the share of the government and the National Development Fund from the revenues from the sale of oil and gas is different from the draft bill and from the frameworks set in the government’s previous plan.

Article 14 of the 7th Development Plan Bill states: “In order to reduce the instability of the government’s financial resources, the resources obtained from the export of crude oil, gas condensate and net gas export, after deducting the share of the Ministry of Petroleum, will be deposited into the National Development Fund account at the Central Bank. . The National Development Fund is obliged to provide the government’s share of these resources, which is determined in the annual budget laws, in the form of one-twelfth. The central bank will transfer the equivalent of the government’s share of foreign exchange resources to the treasury account of the entire country.

Also, in Article 15 of this bill, according to the annual budget rules in recent decades, the National Oil Company’s share of these revenues is set at 14.5 percent.

Based on this, contrary to the process of the 5th and 6th development plans, in which the share of the National Development Fund was specified, and also from the beginning, the share of the National Oil Company and the government’s share were separated from the oil revenue, and the rest went to the account of the National Development Fund, in the proposed framework In the seventh plan, the oil revenues are initially deposited into the National Development Fund account, and this fund deposits one-twelfth of the revenues deposited into the fund into the government account every month based on the share determined in the annual budgets. For example, if the government’s share of oil revenues is considered to be 25 billion dollars in 1403, the National Development Fund should give the government 2 billion and 83 million dollars every month.

It seems that not setting the ceiling and limits for the government’s oil revenues during the program and deferring its assignment to the annual budgets, will be contrary to the goal set in Article 14 of the Seventh Development Plan Bill, which is to reduce the instability of the government’s financial resources, because Postponing the contribution of the government and the National Development Fund to the annual budgets, in the conditions of increasing oil revenues, the request of the government and even the approach of parliamentarians to oil revenues, will lead to more use of these revenues to complete construction projects or increase salaries. be government employees.

The experience of the last few decades in the field of annual budgets and its implementation process shows that not determining the share and limits for the government in the use of oil and gas revenues will create a lot of instability in the government’s revenues, because for various reasons, the government’s foreign exchange revenues with It faces many fluctuations and this problem causes instability in incomes and imbalance in budget resources and expenditures. Also, expenses in annual budgets usually cannot be removed or reduced, because if the budget expenses increase in one year due to the increase in income, these expenses cannot be adjusted or reduced in the next year.

In the 7th Development Plan, good provisions have been seen for managing the budget and increasing tax revenues, so that one of the goals of the program is to increase the share of sustainable revenues (tax revenues, etc.) to 80% of current expenses, but it seems that During the review of the 7th Development Plan Bill, to prevent instability in government revenues and increase the National Development Fund’s share of oil and gas revenues, a specific ceiling should be set for the government’s use of revenues from this sector.

The full text of the 7th Development Plan Bill can be found here Get the text of the 7th development program bill.

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