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Iranian regime President Masoud Pezeshkian presents the 2025-2026 budget plan in a parliamentary session
Three-minute read
The Iranian regime’s 1404 budget (March 2025 – March 2026) is a clear reflection of economic desperation, as the government imposes aggressive tax hikes, excessive fines, and soaring service fees to compensate for its international isolation and self-inflicted financial crisis.
With international sanctions tightening, inflation spiraling out of control, and oil revenues under pressure, the government of Masoud Pezeshkian has turned to its own people as a cash reserve, extracting revenue through a 53% tax increase, inflated penalties, and massive service fee hikes—all while maintaining heavy spending on the IRGC, religious institutions, and state-controlled security forces.
The Regime’s Desperate Revenue Plan
According to the official budget proposal, the Iranian government projects 2084 trillion tomans in tax revenue, an unprecedented 53% increase from the previous year. Based on current free market rates, every U.S. dollar is equivalent to 89,100 tomans.
#Iran’s 2025 Budget: Prioritizing Propaganda, Security, and Religious Institutions Over Public Welfarehttps://t.co/SRfrZfJxDa
— NCRI-FAC (@iran_policy) February 20, 2025
This staggering tax hike includes:
A 73% increase in corporate taxes, targeting businesses already struggling under sanctions.
A 68% rise in personal income taxes, further eroding wages and purchasing power.
A 22% increase in consumption taxes, meaning higher prices for ordinary consumers.
The regime justifies these tax hikes by claiming they will reduce the budget deficit and limit inflation, yet state media acknowledges that the real issue is economic mismanagement and corruption.
According to a Jahan-e Sanat report on March 6, Iran lacks a true budgeting system, instead operating a collection and expenditure fund where revenue projections are overly optimistic while expenses remain fixed and unavoidable.
This contradiction lies at the heart of the 1404 budget: The government assumes high tax collection despite a collapsing economy while guaranteeing unchecked spending on military and ideological priorities.
While the people of #Iran suffer from hunger and poverty, the regime invests millions in religious influence abroad. Watch and judge the admissions of this #IRGC official pic.twitter.com/XXXYj2dvRS
— NCRI-FAC (@iran_policy) September 8, 2023
Fueling Inflation: A Dangerous Currency Policy
The 1404 budget assumes an exchange rate of up to 75,000 tomans per U.S. dollar, indicating a significant devaluation of the national currency. While the government officially claims oil will sell at $70 per barrel, experts warn that sanctions and financial restrictions will severely limit Iran’s ability to access those revenues.
Arman-e Melli also reported on March 6 that the 1404 budget’s revenue projections are highly vulnerable to external pressures, particularly sanctions and the regime’s foreign policy stance. The report warns that if the regime continues its current approach and sanctions are further tightened, the expected revenues will not materialize, leading to a severe fiscal shortfall.
This currency instability directly impacts the cost of living, as essential goods—including food, medicine, and fuel—will become increasingly unaffordable for ordinary Iranians.
Why are ordinary #Iranians slipping under the #poverty line on a daily basis? pic.twitter.com/WV4ZRiZNua
— NCRI-FAC (@iran_policy) December 13, 2023
Extracting Money from Every Possible Source
With international sanctions blocking traditional revenue streams, the government has resorted to suffocating its own population through:
1. Targeting Foreign Nationals (Mainly Afghan Migrants)
A 500% increase in fees for residency services.
A 400% increase in the cost of temporary travel permits.
A projected 2 trillion toman revenue stream from mass deportations signals an upcoming crackdown on migrants.
Meanwhile, foreign clerical students remain exempt from these costs, showing how the regime prioritizes ideological allies over human rights.
2. Skyrocketing Traffic Fines & Service Fees
A 60% increase in traffic fines, raising 9.4 trillion tomans from motorists alone.
A 50% rise in passport fees and national ID services.
A 650% hike in registration fees for foreign vehicles.
According to Jahan-e Sanat, Iran has experienced an average inflation rate exceeding 40% over the past decade, marking the longest period of sustained inflation in the country’s last century. The report highlights that the government’s increasing reliance on revenue extraction through taxes, fines, and service fees will only exacerbate public discontent as wages fail to keep pace with rising costs.
#Iran News in Brief
Ali Aghamohammadi, an advisor to the regime’s Supreme Leader, admitted to the widespread housing poverty and revealed the presence of 2,020 impoverished neighborhoods in the country. According to this member of the Expediency Discernment Council, around 20… pic.twitter.com/qvY5QASWJS
— NCRI-FAC (@iran_policy) October 30, 2023
3. Hiking Education and Exam Fees
Students and professionals seeking certification or higher education will face substantially higher costs as the government increases fees for educational and vocational exams:
Registration fees for technical and vocational exams will more than double, increasing from 60,000 tomans to 130,000 tomans.
University dropout fines will rise by 120%, further restricting students’ financial flexibility.
These measures disproportionately affect lower-income families, who are already struggling with inflation-driven tuition and material costs.
4. New Pricing Scheme for Vehicle Registration
The 1404 budget introduces a discriminatory pricing model for vehicle registration and licensing, differentiating between domestic and imported vehicles:
The cost of registering an imported car will increase from 100,000 tomans to 450,000 tomans, a 650% increase.
For motorcycles, the fee will rise from 20,000 tomans to 150,000 tomans for foreign models.
These increases will hit lower-income workers who rely on imported motorcycles and second-hand foreign cars the hardest.
#Iran’s Regime Fears Impending Social Explosion Amid Worsening #Economic and Social Criseshttps://t.co/h9e5afgF4l
— NCRI-FAC (@iran_policy) March 4, 2025
5. New Exit Taxes and Tourism Fees
The budget targets travelers and tourists with substantial fee hikes:
Exit taxes for Iranian citizens will increase by 30%, with first-time travelers paying 675,000 tomans and repeat travelers 1.35 million tomans per trip.
A new 250 billion toman “tourism tax” will be imposed on foreign visitors, with all revenue allocated exclusively to Mashhad’s religious sites.
These measures reflect the government’s prioritization of religious institutions over economic development, as funds are directed away from infrastructure and tourism expansion.
Austerity for the People, Excess for the Regime
The latest revenue measures demonstrate the regime’s continued reliance on financial extraction, ensuring that economic hardship is borne entirely by the population while military, security, and religious institutions remain fully funded. With inflation exceeding 40% for over a decade, the increasing cost of basic services will further erode public purchasing power, deepen inequality, and fuel growing resentment toward the regime.