Tehran, Iran – Iranian authorities are rolling out electronic coupon schemes in recognition of the dire economic situation under sanctions, but are hiking taxes all over to cover the budget deficit.
As the busy shopping and travel season for Nowruz, the Persian New Year, approaches, the government of centralist President Masoud Pezeshkian has revived the coupon scheme online, this time for at least a few months.
The first use of coupons in Iran dates back to World War II, when the country faced dire economic conditions and hunger under British and Soviet occupation, which ended five years later in 1946.
However, coupons are primarily remembered as they are widely used in the aftermath of the 1979 revolution. Nearby Iraq invaded Iran with support from global and regional authority to counter the new theocratic Iranian facilities, and eight years of war hammered its population.
coupon
Starting this week, low-income and middle-class Iranians have been abandoned rials 5 million (over $5) per person, which can be used to purchase limited quantities of food, such as lean meat, chickens, eggs, milk, edible oil, rice and sugar, at government prices. Approximately 60 million people are eligible to use credits.
People can only purchase 11 items from a list of carefully selected suppliers and shops across the country. Credit purchases are separate from monthly government cash handouts, which currently amount to around $4.85 per person.
The goal is to slightly alleviate short-term pressure on families who have seen declines in purchasing power for years as a result of local mismanagement and all-encompassing Western sanctions.
The government of the late President Ebrahim Raisi, who was in office from 2021 to 2024, eased the pressure by implementing two e-coupon schemes in 2023 and 2024.
His predecessor, President Hassan Roohani, also publicly thought about relying on coupons after the US withdrawal from Iran’s nuclear deal in 2018 and imposing harsh sanctions on the country.
On the other hand, taxes everything
The Pezeschkian administration, which lost two key members in a political conflict with hardliners last week, is working on a budget crunch by cutting costs and increasing revenue.
The government’s approval budget for the Iranian calendar year 1404, which begins on March 21, often shows an increase in tax and services costs much higher than Iran’s current 35% inflation rate.
The Iranian government is being pushed to find new revenue streams, including tax increases, to reduce the country’s dependence on oil revenues hit by the US “maximum pressure” tactics.
The Pezeshkian government said this month it will use tax revenues to pay 73% of its current expenses, excluding infrastructure spending.
A February report by the Iranian Parliamentary Research Center shows that the government’s total tax revenue is expected to increase by 53% in fiscal year 1404.
The budget is foreseen A 73% rise in total government profits from corporate income tax Compared to the previous year, income from personal income tax increased by 68%.
The Congressional Research Division foresees a 36% increase in wealth and property taxes compared to the previous year.
Taxes on imports are due to rise by 85%, most of the government’s revenues and related increases from imports of new or used foreign cars, after the long-standing ban was lifted in 2022.
During the Holy Muslim Month of Ramadan, restaurants and hotels must pay permission to allow them to operate, while not publicly destroying fasting by eating, drinking and smoking, which is considered a crime under Iranian Islamic law.
A few months after Iran raised the retirement age for men to two years, taxes increased in 62, and since increasing the year required to receive full men’s pensions from 30 to 35.
Amidst the free fall of another currency and the prolonged energy crisis, the government that fought has also been accused by lawmakers who have been reinforced for deliberately underestimating the country’s currency in order to earn short-term profits.
Make the service more expensive
In addition to tax increases, the 1404 budget is much more expensive while strengthening financial penalties for crimes, a long list of government services offered to Iran and foreigners.
The fees for issuing IDs and passports nationwide are increasing, and registering your vehicle or motorcycle is more expensive. Several fees and technical and vocational exams related to the university are expected to rise.
Notably, as Knowles is urging millions of Iranians to travel this month, authorities expect revenue from traffic fines to rise by up to 30% until early April.
Many major traffic violations had their penalties tripled about eight months ago, and were expected to hike another 50% next year, including dangerous driving and drunk driving.
Authorities plan to charge more Iranians for trying to leave the country by increasing taxes on departures by about 30%. Repeated departures cost more.
The state continues to impose financial penalties and publish criminal cases on those deemed to have violated the mandatory hijab law. Vehicles will be fined and locked up for several weeks if reported repeatedly for hijab crimes.
The Iranian government plans to make services offered to millions of migrants and refugees across the country more expensive, including the costs of issuing or renewing travel and work permits.
Last month, Tehran Municipality announced that the costs of services offered to foreigners would be 54% higher for the next Iranian year.
These price increases will affect mainly migrants and refugees from nearby Afghanistan. Afghanistan has swelled Iranian numbers in the aftermath of the Taliban acquisition after the US withdrawal in 2021.
Iranian authorities acknowledge at least 6 million Afghans living in Iran, a country of around 90 million, but some estimates are millions higher.
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