EghtesadOnline: Taxing gold coins should not push up prices of the yellow metal because the tax is to be levied on wholesalers who pre-purchased coins from the Central Bank of Iran, says the president of the special gold commission at the Iran Chamber of Guilds.
Mohammad Kashtiaray said tax won’t be levied on retail purchases, adding that it particularly targets those buyers who purchased gold coins in 2017-18.
“If this group of buyers sells the coins, they will make a fat profit that will be taxable,” the parliamentary news website ICANA quoted him as saying.
On Saturday each benchmark Emami gold coin was sold for 45.45 million rials ($348) while the Bahar Azadi coin was worth 44.93 million rials ($345), according to Financial Tribune.
The caretaker of the Iranian National Tax Administration unveiled a plan last week to tax buyers of gold coin who pre-purchased the coins from the CBI during the previous fiscal (March 2018-19).
Mohammadqasem Panahi pointed to a clause in the existing tax code based on which all those who bought up to 20 coins from the CBI in the past fiscal are exempt from paying tax.
Those who purchased between 20-60 coins will have to pay 1.5 million rials (about $12) per coin. The owners of 60-00 coins should pay 2 million rials for each coin and those with 100-200 coins are obliged to pay 2.5 million rials.
Tax payers should pay their dues via an electronic platform the details of which are available on the official INTA website.
The new rule does not apply to owners of more than 200 gold coins. Natural entities owning more than 200 gold coins are required to file their tax returns and submit the forms by June 21. The deadline for legal entities owning gold coins ends on July 21.
Taxpayers unable to pay their dues in lump sum can pay in 4-month installments.
As soon as the tax plan was revealed it triggered a controversy leading to criticism of the CBI as it had assured buyers during the massive presale of gold coins two years ago that the pre-purchased coins would be tax free.
However, the new tax law apparently doesn’t contradict the CBI rule. According to INTA, the taxes are Capital Gains Tax and not VAT.
Observers say with the new tax regime the government is trying to secure new income sources to compensate its shrinking oil revenues emanating from the new US sanctions.
“The government has ventured into taxation to raise its earnings because it is unable to cover its expenses due to the obstacles in the way of oil exports,” Mansour Moradi, a member of the Majlis Planning and Budget Commission says.
He said the new rule is rather ambiguous in that it singles out trade in gold coins and does not say anything about taxing jewelry.
Foreign currency and gold coins have always been safe havens for Iranians when economic times are bad, mainly due to the tanking of the national currency.