The cash-strapped government of the Islamic Republic is reportedly planning to levy taxes on bank deposit interest income, the Islamic Revolution Guards Corps (IRGC)-linked news agency, Fars reported.

Fars published a document on Wednesday, October 30 that shows Iran's State Tax Organization and the Ministry of Economic Affairs and Finance have decided to amend the tax law to levy taxes on bank deposits interest.

A draft amendment predicts the tax would bring the government between 200-300 trillion rials more revenue; or $4.7-6 billion based on the official exchange rate or around just $1.8-2.5 billion if calculated based on the free market Rate of dollar.

However the government's official news agency IRNA has categorically denied the Fars’ report, citing the Minister of Economic Affairs and Finance.

In a recent report, the International Monetary Fund (IMF) announced that Iran needs to sell oil at $190 per barrel to compensate for its budget deficit in 2020, given the impact of U.S. sanction on Iran’s oil exports.

Meanwhile, forecasts say the price of oil in 2020 will be at around $60 per barrel.

President Hassan Rouhani and his cabinet hope to compensate for the significant drop in income from crude oil exports through raising taxes.

But many experts believe that levying taxes on bank deposit interests will have a negative impact on the economy.

While the Securities and Exchange Organization is dissatisfied with bank deposits being exempt from taxes, the Central Bank of Iran has opposed the scheme, cautioning against the potential social backlash of the tax scheme.