Ahmadinejad defends economic plans

November 13, 2008 - 0:0

Iranian President Mahmoud Ahmadinejad responds to recent criticism, promising to bring fundamental economic change to the country.

Prominent Iranian economists have criticized President Ahmadinejad for not taking proper measures to deal with the country's economic decline.
In an address in the northern city of Sari on Wednesday, the Iranian president defended his plans to reform the economy.
""The government will overcome the difficulties by collecting taxes. It will also allow us to fill the gap (between different social classes),"" Ahmadinejad said.
In line with his economic reform plan, Ahmadinejad has introduced a value added tax (VAT) program. Under the new VAT policy, Iranian businesses need to pay 3% of their sales receipts to the government.
The introduction of the VAT program was met with October strikes in Iran's bazaar, the backbone of Iran's traditional financial system. Following the strikes, the Iranian president postponed the implementation of VAT for two months.
With the help of direct taxation, Ahmadinejad hopes to control Iran's rising inflation - which stood at 29.4 percent per year according to the Central Bank of Iran's September figures.
In the Wednesday address, the president said when the taxation system is correctly implemented, the government will be able to freely provide security and revamp the education and health systems.
President Ahmadinejad also plans to cut the subsidy for energy and other basic commodities and redistribute the money as direct payouts to citizens.
As the result of the sharp downward spiral of oil prices, economists predict that within months Tehran will face a considerable budget deficit.
(Source: (Press TV)