Date: Nov 29, 1998 [ 9: 59: 39]

Subject: Iranian government to submit austerity budget to parliament Sunday

From: Farhad Abdolian


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From: farhad@algonet.se (Farhad Abdolian)
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Subject: Iranian government to submit austerity budget to parliament Sunday
Date: Sun, 29 Nov 1998 09:59:39 GMT
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TEHRAN, Nov 28 (AFP) - Iran's government, its finances squeezed
by plunging oil prices, will submit an austerity budget to
parliament on Sunday that includes huge tax hikes and spending
cuts.
The budget for the Iranian fiscal year beginning March 1999
foresees revenue of 85,368 billion rials (about 28 billion dollars
at the official exchange rate) and expenditure of 93,800 billion
rials (31 billion dollars), leaving the government with a three
billion dollar deficit, newspapers said Saturday.
The government has proposed meeting the deficit with a 34
percent increase in tax revenues.
Iran, the world's second largest oil producer, is facing a
severe cash shortage caused by falling oil prices which have sunk to
their lowest levels in a decade.
The proposed budget has forecast oil revenues of 25,880 billion
rials (8.4 billion dollars) based a price of 12 dollars a barrel,
although Iranian oil is currently selling at below 11 dollars.
Iran, which earns 80 percent of its hard currency from crude
exports, has seen its revenues cut by 40 percent, leaving a budget
shortfall this year of around 6.3 billion dollars and prompting the
government to resort to a series of emergency measures to make ends
meet.
The government of President Mohammad Khatami has called for
various measures to reduce its dependence on oil revenues, including
more efficient tax collection and boosting non-oil exports.