CHAPTER SEVEN:
ARTICLE 58- All
reductions, preferences, tax exemptions and customs duties of all agencies
content of Article (11) of this Law- institutions, revolutionary, public and
non-governmental entities excluding cultural institutions- and the exemptions
granted on the basis of the international commercial conventions, as well as
the exemptions granted in connection with import of pulp used in publication of
educational text books shall be abandoned from 1379 (21 March, 2000)
Note 1: Enforcement of the provisions of this Article on the institutions that have been granted the permission by the late Imam Khomeini or the Supreme Leader shall require approval of the Supreme Leader.
Note 2: The main defense items procured from
abroad by the Ministry of Defense and Logistics of the Armed Forces and other
armed forces are not included in this Article.
ARTICLE 59- In the
taxation system:
A- To enhance efficiency of the
taxation system , to eliminate the
existing organizational barriers, and to consolidate all the activities
pertaining to tax collection, government is authorized to set up the “State
Organization of Taxation Affairs” as a public agency and under the auspices of
the Minister of Economic Affairs and Finance. Upon the establishment of this organization, all the
existing authorities, functions, manpower, equipment and facilities at the
disposal of the Ministry of Economic Affairs and Finance that are currently
used by the Office of the Vice Minister for Taxation Affairs, and affiliated
tax agencies, will be transferred to this organization.
The organizational
structure of the said agency and the executive by-law of this Article shall be
proposed jointly by the Ministry of Economic Affairs and Finance, and the State
Administrative and Employment Affairs Organization and be approved by the
Cabinet.
B- Ministry of Economic
Affairs and Finance is required to design and operationalize within the first
three year of the development Plan, a comprehensive tax information system,
through collecting and processing information on economic activities of the tax
payers in the nationwide networks, and to develop a procedure of
self-declaration practice in taxation.
ARTICLE 60*- To stabilize the foreign exchange
earning from export of crude oil during the Third Plan , to convert the
proceeds of oil revenue to other forms of financial instruments and assets, and
to insure accomplishment of the activities envisaged in the Plan, government is required to undertake the
following actions by opening a “Prudential Exchange Reserve Account”, and a
corresponding “Rial Reserve Account”:
A-Effective from the
year 1380 (2001/02) the foreign exchange revenue from the crude oil export
exceeding the envisaged figures in table (2) of this Law shall be deposited in
an account titled as the “Reserve Account for the Crude Oil Income” with the
Central Bank of the Islamic Republic of Iran.
B- From the beginning of
the third year of the Plan, in case the revenue from the crude oil export falls
short of the envisaged figures in table (2) of this Law, government is
authorized to withdraw from the said reserve account, once in every six month
interval. The Rial
equivalent of the funds will be held with the government’s general revenue
account.
C- Part of the balance
of the foreign exchange reserve subject to item (A) of this Article shall be
exchanged at the prevailing market
rate of exchange, the proceeds of which will be utilized to extend short
term credit facilities in order to promote investment and business activities
in accordance to the Third Development Plan priorities; and its Rial equivalent
will be transferred to the “Rial Reserve Account” with the Central Bank of the Islamic Republic of Iran, upon
assurance of the realization of the Rial income as projected in the annual
budget law.
D- Utilization of the
“Rial Reserve Account” to finance the government’s general budget shall be
permissible merely on the condition of decreasing foreign exchange income from
the oil export, as compared with the envisaged figures and inadequacy of tax
revenue as envisaged in Table (2) of this Law. Utilization of
the said reserve account is forbidden in the case of reduction of the
government’s general revenue due to decline in the tax revenue.
E- The by-law of this
Article to be proposed jointly by
the Plan and Budget Organization, the Central Bank of the Islamic Republic of
Iran and the Ministry of Economic Affairs and Finance within three months from the
date of enforcement of this Law and will be approved by the Cabinet.
ARTICLE 61-
A- Exchange of the
contract agreements for development projects categorized as research, profit-making and non-profit making
projects shall be undertaken only once during the Plan period. Agreements exchanged for adjustment of
annual project funds with the annual budget laws will be considered as
amendments; they shall not cause any increase in the targets and number of the
projects. Agreements concerning
the exceptional cases leading to an increase in the volume of operations or the
number of projects, shall be treated on the basis of the mechanism foreseen in
the
Item (B) of this
Article.
B- Exchange of new
agreement for profit-making and non-profit making development projects shall be
permissible merely upon the
following procedures:
1- Undertaking technical, economic, social and environmental
feasibility studies.
2- Undertaking detailed design
studies.
3- Making sure that there is
sufficient funds and/or financing, taking into consideration other commitments
regarding the on-going development projects of the concerned executive agency.
Exchange of contract
agreements for development projects of exclusively military nature and in the
defense sector shall be subject to a special by-law to be proposed jointly by
the Staff-General of the Armed Forces, Ministry of Defense and Logistics of the
Armed Forces and the Plan and Budget Organization; and it will be approved by
the Cabinet.
C- Executive agencies
are required to re-evaluate their on-going development projects, as proposed by
the Plan and Budget Organization,
in order to simplify and economize their execution, while observing the
technical standards.
D- By the end of 1379
(20 march 2000), the Plan and Budget Organization, in cooperation with
executive agencies, is required to set priorities of the ongoing development
projects on the basis of the appropriated funds, and to determine their
completion date, taking into account the extent of the work progress, and the
target of economizing and accelerating their execution.
E- The executive by-law
of this Article to be proposed by the Plan and Budget Organization and approved
by the Cabinet.
ARTICLE 62-Once in the
Plan period, government is authorized to
re-assess the fixed assets of the state-owned enterprises whose one
hundred percent (100%) shares belong to government and/or belong to the same
public enterprise . The revised
value of the appraised enterprise shall not be subject to income tax or any
other tax, and the said amount shall be included in the capital gain account of
the government or the pertaining state-owned enterprise in the said public
corporation.
The executive by-law of
this Item and the manner of depreciation of the appraised and depreciable fixed
assets shall be proposed by the Ministry of Economic Affairs and Finance and
approved by the Cabinet.
ARTICLE 63-The ceiling
of public transactions ((subject matter of articles (80), (86),and (87) of the
State Audit Act)) on the basis of the CPI Consumer Price Index for 1378(1999) shall
be adjusted annually on the suggestion of the Ministry of Economic Affairs and
Finance and approval of the Cabinet.
ARTICLE 64- The current and development credits of
this Law shall be allocated among different sectors for inclusion into the
country’s annual general budget, taking into account the principles and
classification of the government functions as stated in this Article and by
observing the following priorities to be proposed by the Plan and Budget Organization. The programs for each sector will be
formulated in proportion to the envisaged appropriations in the general revenue and the non-public
sector.
A- Performance of the functions
concerning the government sovereignty will be financed through the government
revenue. These functions would be
beneficial to all segments of the society, utilization of these services by some will not limit their
use by others, and their realization will strengthen the government
authority. These functions include
national management and administration of the state affairs, enactment of law
and regulations, securing social order, establishment of social justice,
defending the country’s borders; and promoting Bassij Forces (People’ Army of
Volunteers).
Allocation of the budget
for these functions will be commensurate with the efficiency level of the
agencies concerned.
B- Functions related to
social undertakings whose social benefits are superior to the individual
interest and will improve quality of
life of the people , including general education, technical and
vocational training programs, health and medicare, physical education; cultural
and artistic activities and religious propagation.
The funds required to
perform these functions will be financed through the general budget resources
and participation of the non-public sector. The relevant public agencies are required to prepare an
appropriate environment for the development of non- public sector and divest
part of the government ongoing undertakings to private sector.
One hundred(100%) of the
proceeds of divesting such kind of activities to the non- public sector shall be utilized to expand the government contribution in the
regions where the non- public sector is reluctant to invest. Enhancing quality of the present public
services is also considered as part of this program.
C -The funds required
for the implementation of the non-profit development projects, that will
strengthen the socio-economic
infrastructures in which no investment by the private sector is expected
shall be financed through the government general budget.
D- Public functions
related to economic undertakings in the productive and infrastructure sectors
shall be financed through resources of the state-owned enterprises and/or
enterprises and profit-making entities affiliated with the government and or/
other resources not affiliated with the government general budget, except in
cases where the government involvement is justified on the ground of immensity
of the investment needed and other considerations. Approval of the Cabinet will be necessary in these
cases. In the fields of
infrastructure investment, in addition to the investment by the state-owned
enterprises that are responsible for development of the infrastructures, using
their own resources, should the state-owned or non- public industrial and
mining enterprises make investment in these fields to meet their own needs, the
aforesaid expenditures will be tax deductible.
Part of the government
functions in this sector will be gradually entrusted to the non- public sector.
ARTICLE 65- In designing
the annual budget bills,
government is authorized to include in the administered funds or through
other customary methods, payment of a portion of the funds for the profit
making development projects in the framework of the facilities and financial
and technical assistance through specialized and developmental banks. The return from the profit-making
projects subject of Article (32) of the Plan and Budget Law enacted in 1972
shall be appropriated to other profit making projects with the same mechanism.
ARTICLE 66- The
state-owned enterprises content of Article (11) of this Law and the Islamic
Republic of Iran Broadcasting Organization, observing the related regulations, is authorized
to take measures to sell the assets in excess of their own need, except
vehicles, through tender, and invest equivalent of one hundred percent (100%)
of the sales proceeds in the framework of the approved budget. The investment funds equivalent to the
margin of the nominal book value of the sold assets and the proceeds of the
sales shall be exempted from income tax.
ARTICLE 67- Ministries of “Industries”, “Mines and
Metals”, “Energy”, and “Petroleum” are authorized to promote investment and to
grant financial and technical assistance to the approved projects in the
related sectors for enhancing the design level, equipment manufacturing
engineering, mining and exploratory reconnaissance, provide credit facilities
from the general budget and in the form of the administered funds entrusted to
the banks and pay the interest rate differentials.. The amount of the said administered funds including the
credit for payment of the interest rate differentials will be determined in the
annual budget law.
In case of necessity, a
portion of the credit required for the said projects that are financed by the
general budget can be considered as gratuitous aid. This aid and the interest subsidy to the projects will be
determined by a committee composed of the ministries concerned and the Plan and
Budget Organization.
The revenues from
repayment of the facilities financed through the general budget will be re-used
through the above-mentioned method.
The balance of the above-mentioned funds at the end of the Plan period
plus the received installments of the said facilities after the termination of
the Plan will be utilized to
recapitalize the specialized
banks, the equivalent of which will be deducted from the government debt to the
banking sector.
ARTICLE 68- In order to
grant financial and technical assistance aimed at enhancing the design
capabilities, engineering, and manufacturing of equipment, for development of
prototypes for manufacturing machinery, research and exploratory operations,
authorization is given to the subordinate enterprises of the Ministries of
“Post-Telegraph-and Telephone,” “Industries”, “Mines and Metals”, “Energy”, and
“Petroleum”, to finance the projects approved by the general assemblies within
the corporation’s internal resources in the form of funds administered by banks
and pay the interest rate differentials out of the corporation’s internal
reserve. The amount of the said administered funds as well as the payment of
the interest rate differentials are
to be provided in the
annual budget of the said enterprises.
ARTICLE 69- Government is required to formulate the
annual budget bills in such a way that any likely budget deficits shall not be
financed through borrowing from the Central Bank and the banking system.