Coll 28/59 ‘Persia. Financial Situation’ [‎4r] (18/842)

@
[390 z—5]
B
THIS DOCUMENT IS THE PROPERTY OF
m
PERSIA.
CONFIDENTIAL.
HIS BRITANNIC MAJESTY’S GOVERNMENT
^
. I , « i s
K 1 i April 23. 1935.
I
P 3 5 I Section 5.
[E 2584/365/34] No. 1.
Mr. Knatchbull-Hugessen to Sir John Simon.—(Received April 23.)
(No. 147 E.)
Sir, Tehran, April 4. 1935.
I HAVE the honour to transmit to you herewith a translation of the Iranian
budget for the year 1314, ending the 21st March, 1936. The budget was passed
unanimously by the Majlis on the 6th March. A translation of, and report on, a
supplementary budget which was passed on the 13th March are being transmitted
under cover of a separate despatch.
2. The new budget estimates revenues for the current financial year at
751,123,487 rials (about £11,555,000 at the present exceptionally high exchange
value of 65 rials to the pound), and expenditure at 750,827,790 rials, giving
an estimated surplus of 295,697 rials (£4,549). The budget estimates for
the previous year balanced at about 621 million rials, so that the increase in
both revenue and expenditure this year is estimated to be higher by approximately j
130 million rials, or almost 21 per cent.
3. Increases on the revenue side include an item of 26,200,000 rials (about
£400,000) as proceeds of the new monopoly tax on cotton piece-goods—a useful
item when it is recalled that an increase of the customs duties on cotton piece-goods J
is at present precluded by treaty stipulations. Income and stamp duties are
expected to yield an additional 15 million rials, customs duties 10 million rials,
the Tobacco Monopoly 15 millions rials and the Opium Monopoly 10 million rials.
A net increase of 9 million rials is anticipated as a result of the substitution of
a 3 per cent, tax on agricultural produce marketed for the previous taxes on land.
Similarly, the replacement of motor registration taxes by a tax on motor spirit
and paraffin is estimated to give a net increase of 10,700,000 rials. Other
budgeted increases are 14,900,000 rials from the operation of a tar factory An East India Company trading post. ,
4,500,000 rials from sale of State lands, 3,900,000 rials from the Caspian fisheries
and 1,500,000 rials from the working of the red oxide deposits. Am item of
9 million rials unforeseen revenue may possibly be connected with the institution
of an import monopoly for motor vehicles or with some other monopoly scheme not
yet disclosed. ,
4. On the expenditure side, by far the largest single item is the vote for the | f
Ministry of War, which is higher* by 20 million rials. Including provision for
road guards, the vote for this Ministry amounts to 249,408,380 rials, or almost «
exactly one-third of total planned expenditure. A special credit of £2 million I
for military supplies voted in the supplementary budget is not included in this |
figure. A special credit of 20 million rials (about £308,000) for road construction
indicates that the ordinary revenues from the road tax (which are not shown in
the budget) are not sufficient to meet increasing needs of road transport. For
agriculture, a sum of 12,700,000 rials is provided; last year the Departments of
Industry and Agriculture were joint, and no separate vote was shown. A credit
of 10 million rials for industrial undertakings is only 25 per cent, of the amount
voted last year, but separate credits of 26,200,000 rials for a cotton spinning and
weaving mill (presumably the one at Ashraf for which the order has already been
placed) and 14,500,000 rials for the completion of a tar factory An East India Company trading post. bring the total
to about 10 million rials more than last year. The contribution to the capital of
the Agricultural Bank is increased from 5 million rials to 10 million rials.
There is a small increase of 3,450,000 rials in the credit for the Ministry
of Education. Finally, the following items for capital of new State monopoly
enterprises are included : 30 million rials for a company for the stablisation of
the price of grain; 15 million rials for a State insurance company and 2,230,000
rials for the recently formed monopoly company for importing cotton piece-goods.