President Masoud Pezeshkian submitted the government’s budget bill for the next fiscal year to parliament on Tuesday, a proposal some lawmakers have described as the most contractionary in the country’s history, aimed at curbing inflation and moving toward a zero budget deficit within two years.
The draft budget prioritizes boosting sustainable revenues – particularly taxes – reducing dependence on oil income and tightening spending.
One of the most significant changes is the planned removal of subsidized foreign exchange rates for basic goods, lawmakers said. Under the proposal, instead of allocating cheap hard currency to import essential items, the rial equivalent would be paid directly to households through electronic vouchers.
Ten essential goods would be covered under the scheme to meet the most urgent household needs and shield vulnerable groups from price shocks. Supporters say ending the preferential exchange rate would reduce corruption while increasing transparency in subsidy distribution.
The budget reflects a cautious outlook for oil exports and access to foreign currency amid the risk of tougher sanctions, as the government seeks to rely on more stable sources of funding.
According to the bill, revenue from oil and petroleum product sales is set to fall to 2,630 trillion rials next year from 6,050 trillion rials in the current year, a drop of about 56%.
Tax revenues are projected to rise 42% to 29,610 trillion rials, while overall public revenues are expected to increase by 39%, the bill shows.