Time’s Up for Unrelenting Exporters
EghtesadOnline: A list of 150 companies that failed to repatriate their export revenues has been sent to the judiciary, head of Iranian Export Confederation said, noting that the deadline of the Central Bank of Iran for the repatriation has expired.
"The CBI has provided last year's list on export revenue repatriation to the tax authorities,” Mohammad Lahuti said, adding “companies that did not bring the money back to the country will be summoned by the courts" IBENA quoted him as saying on Tuesday.
"As far as I know, 150 major export companies have refrained from repatriating even one dollar of their revenue," Financial Tribune quoted him as saying.
The CBI had warned exporters to respect their financial commitments vis-à-vis returning overseas revenues earned in the previous fiscal year (March 2018-19).
The Iranian National Tax Administration went so far as to announce incentives in the form of tax holidays for law-abiding exporters. For example, export companies will not pay tax on their overseas income if they fulfill their forex commitments on time. INTA will also refund the value added tax to these exporters within a month from the date of repatriation.
As per the measures, tax authorities will grant exemptions to companies that repatriate more than 70% of the financial commitment.
Some export companies blame sanctions on the banking sector for their inability to bring back the overseas earnings. They also criticize the CBI for imposing stringent rules on exporters and have called for measures that facilitate money transfers to and from Iran.
Companies are required to sell at least half of their export earnings in the secondary market at an exchange rate which is below the higher open market price.
Petrochemical companies must bring back at least 60% of their earnings and sell it via the secondary foreign exchange market known as Nima (Persian acronym for Integrated Forex Deals System).
As per law, at least 20% of the total proceeds sold in the secondary forex market must be in cash. The balance can be used to import goods, machinery and equipment either by the exporting firm or any other third party.
In the previous fiscal (March 2018-19) exporters repatriated $18.7 billion. The money was brought back as per rules mandated by the CBI.
The government tightened rules on repatriating currency earnings by non-oil exporters in the spring of 2019 after the United Sates unleashed a new round of sanctions on Iran’s key oil, banking and shipping industries.
With oil exports getting difficult as time passes, the government has shifted its focus on the non-oil export and engineering export sectors for currency revenue. It has appealed to major enterprises to delve further into the export markets, particularly in the neighboring countries.