A fresh report from the Iranian National Tax Administration (INTA) indicates a sharp decline in tax revenues during the first two months of the current Iranian year, a trend that could pose a serious challenge to achieving national budget targets.
According to the report, the total tax revenue collected during this period stood at approximately 152 trillion tomans. In nominal terms, this represents a 29% decrease compared to the same period last year. However, when adjusted for real value based on the constant prices of 2021, the drop in tax revenue reaches approximately 60%. This significant decline is visible across all major tax sectors simultaneously.
Broad Declines Across Key Sectors
Within the tax revenue structure, all four primary sectors - income tax, goods and services tax, corporate tax, and wealth tax - experienced declines:
Income Tax: Witnessed the steepest decline, plunging 36% in nominal terms and roughly 64% in real value.
Goods and Services Tax: Experienced a tangible drop. Analysts suggest this could be a symptom of declining household purchasing power and mounting pressure on domestic consumption.
Corporate and Wealth Taxes: Both registered a 27% decline in nominal figures, with inflation-adjusted estimates revealing a near 59% drop. This aligns with recent reports of financial strain on major domestic industries, such as petrochemicals and steel, over the past few months.
Budget Deficit Risks Loom Large
This downward trend is unfolding at a critical time, as the government’s budget bill for the current year had targeted a 42% growth in tax revenues, with nearly half of the general budget resources planned to be funded through this avenue. Meanwhile, the head of the National Tax Administration had previously warned about the difficulties of meeting this year’s tax targets, hinting at the potential need for an amendment to the 2026 budget. This underscores the rapidly growing pressure on the government’s primary revenue streams.
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