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Ministry of Finances: Economic Ingenuity and Institutional Reconstruction
| The IRANIAN FINANCIAL REJUVENATION AND ACCOUNTABILITY ACT قانون جوانسازی مالی و پاسخگویی ایران
The Iranian Constituency Assembly have hereby approved the joint initiative of the Ministry of the Economy and the Ministry of Finance and Industry a series of initiatives aimed toward reconstruction and modernization of the Iranian fiscal, monetary, and tax institutions that will guarantee proper economic expansion, enhancement, and progression. From previous policies implemented so far, the Iranian domestic market has demonstrated hints of expansion and new equilibriums. The Ministry of the Economy shall implement a proactive fiscal policy to optimize the structure of government expenditures and use government funds more efficiently while the Ministry of Finance and Industry will improve tax policies that encourage structural adjustments to strengthen local government debt management and promote sustainable agricultural development while advancing urbanization. Both Ministries will establish joint agencies and new departments with Assembly commissions to refine the medical and health care and social security systems and give impetus to the reform and development of education, science and technology, and culture. It has been deemed an important goal to improve the structure of central government investment in capital construction and to continue to review and regulate charges and fees to reduce the burden on businesses. The Iranian government moves to establish the Railway Development Fund to attract social capital into the railway construction, especially in central, western, and southern regions of the Empire. Moreover, both Ministries will work to support the pilot and demonstration projects to build new types of urbanization via promoting the use of the Public and Private Partnership (PPP) model and encourage the involvement of nongovernmental capital in investing and operating urban infrastructure by means of franchises and other means. The Prime Minister has hereby signaled to leverage the role of development projects to finance and accelerate redevelopment of shanty towns while exploring new ways to establish national guidance funds for venture capital in emerging industries to encourage and guide the development of production-oriented service industries. Transformation of Economic Growth Pattern تغییر الگوی رشد اقتصادی Boosting domestic demand is both a major force driving economic growth and an important structural adjustment. Iran will fully leverage the basic role of consumption and the key role of investment, focusing on boosting consumption and stimulating both supply and demand to establish a permanent mechanism for increasing domestic demand. The Iranian Constituency Assembly shall take and use investment as the key to maintaining stable economic growth. Through such actions, the government shall promote actively and steadily the collective negotiations of wages in enterprises, adjust appropriately the minimum wage standards, and promote the reasonable increase of wages for normal employees. Furthermore, new economic initiatives shall seek an increase in the income for farmers by continuing to increase spending on “agriculture, rural areas and farmers”, improving the subsidy policy for agriculture, and environment for farmers to go out to work elsewhere. Bank Melli Iran will comprehensively use a combination of monetary policy tools on both quantity and price basis, improve macro-prudential policy framework, maintain liquidity at an appropriate level, achieve appropriate growth of monetary supply, credit and aggregate social financing, and improve the structure of financing and credit. Moreover, monetary policy will be closely linked with the deepening reform and the market is to play a decisive role in resource allocation. The macro-management shall be further improved in light of the financial deepening within market innovation and enlargement schemes. Iranian financial services are to be enhanced by increased supply and competition in order to consummate and promote a higher efficiency of financial transactions and greater capability of serving the real economy. The Ministry of the Economy, with approval from Prime Minister and cooperation from Bank Melli Iran, will accelerate the construction of an urban and rural social security system, expand the coverage of insurances, and gradually raise the level of social insurance. Additional Iranian Economic Initiatives ابتکارات اقتصادی اضافی ایران 1) Strengthen services of elderly care, and encourage participation of private sector in establishing large and chain elderly care facilities. 2) Support NGO capital to establish non-profitable medical service institutions, and expand gradually the pilot scope for qualified foreign capital to set up wholly-owned medical institutions. 3) Establish and improve modern market for cultural products, and promote cultural creativity as well as relevant industries. 4) Strengthen tourism infrastructure, introduce the system of annual leaves with pay for employees, encourage the development of tourism in rural areas and recreational tourism. Fiscal and Tax Institution Reform: A. The goal of the reform is to set up a unified, comprehensive, law-based, well-regulated, open, transparent, sustainable and efficient modern fiscal system that is conducive to better resources allocation, market unification, social equality and national stability. The reform focuses on 3 areas: improving budget management system, strengthening budget constraints, regulating government behaviors, exercising effective supervision, and speeding up the establishment of a comprehensive, well-regulated, open and transparent modern budgetary system; deepening tax reform, optimizing tax structure, improving tax functions, stabilizing macro tax burden, advancing law-based tax administration, building a tax system that is conducive to scientific development, social equality, and market unification, giving full play to the tax functions in raising fiscal revenue, adjusting distribution, and optimizing economic structure; adjusting fiscal relations between the central and local governments while keeping the distribution of revenues stable, dividing power and spending responsibilities between central and local governments in a rational manner, establishing a system whereby power matches spending responsibilities 5) Implement a preferential policy of deferred payment of individual income tax to encourage the development of annuity plans in enterprises and public institutions A. employers and individuals’ contributions to enterprise annuity or occupational annuity within the limit are deductible for individual income tax purpose; i investment income from enterprise annuity or occupational annuity funds is exempt from individual income tax; benefits payments of enterprise annuity or occupational annuity actually received by individuals will be subject to individual income tax. 6) Advance coal resource tax reform from volume-based collection to ad valorem based collection A. At present, apart from petroleum and natural gas, resource tax on coal, iron ore and other items remains volume-based. Going forward, Iran will gradually review and cancel the fees and charges related to coal resources, and deepen the reform of levying price-based resource tax on coal. 7) Implement a comprehensive government financial reporting system A. Iran will establish government accounting standards system, formulate government financial reports system, and prepare accrual basis government financial report in order to reflect the government financial situation in an accurate and comprehensive way, and provide effective information for fiscal risk prevention, government credit rating as well as performance supervision and assessment to promote sustainable development of finance and economy. 8) Implement a comprehensive government financial reporting system A. A trial program has been launched in 10 provinces, which permits them to issue bonds and repay debt by themselves in 1961 (ten-year deadline for repayment of loans) under the precondition that the State Senate in coordination with the National Bank of Iran controls the volume and duration of such bonds. In the following years, the trial will be gradually expanded based on the experience of these trials. 9) Fiscal system reform: A. Iran will accelerate the pace in adjusting duties and payment responsibilities of the central and local governments. Iran will appropriately strengthen the duties and payment responsibilities on the basis of transforming government functions and properly defining the boundary between government and the market. While maintaining overall stability of current financial structure between central and local governments, Iran will further rationalize the revenue allocation between central and local governments in line with the tax reform and nature of tax items. 10) Fiscal system reform A. 3 % VAT rate will replace previous rates on particular general taxpayers such as tap water supply and small hydro-power plants خداوند امپراتوری ایران را حفظ کند. خدا رحمت کنه شاه رو |
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