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EghtesadOnline: Budget tax revenue projections for the current fiscal year (March 2020-21) were achieved in their entirety by March 10, Omid Ali Parsa, the head of the Iranian National Tax Administration, says.

The current Iranian year will end on March 20.

The budgetary goal on tax revenues for the current year was set at 1,950 trillion rials ($7.8 billion). The government’s overall tax revenues stood at 1,090 trillion rials ($4.36 billion) in the year ending March 2019 and 1,410 trillion rials ($5.64 billion) in the year ending March 2020.

“Self-declaration of tax returns accounted for 70% of the country’s tax revenues, which allowed INTA to focus on improving tax collection from major taxable persons. INTA also managed to collect 100 trillion rials [$400 million] from overdue tax returns,” he was quoted as saying by Mehr News Agency. 

Noting that tax evasion accounts for an estimated 400-450 trillion rials ($1.6-1.8 billion), the official said, “Up to 40,000 bank accounts with transactions of over 50 billion rials [$200,000] per year will be investigated technically and professionally to prevent tax evasion.” 

Asked about new provisions legislated by the parliament on taxing luxury cars and residential properties, the official said, “We have good access to needed data. Governmental organizations’ cooperation with INTA has improved compared to the past. At present, only five agencies have yet to place the required information at our disposal. We’ll tax luxury and vacant homes as soon as the Roads and Urban Development Ministry completes the National Property and Housing Database.”

Finding new tax bases is one of the parliament’s key tools to tackle budget deficit in the next fiscal year (starting March 21). Taxing cars worth over 10 billion rials ($4,000), houses worth more than 100 billion rials ($400,236), tax on the income of social media influencers with more than 500,000 followers and celebrities who earn upwards of 2,000 million rials ($8,000) annually are the latest decisions made by lawmakers regarding taxation. 

According to an earlier decision of Majlis Joint Commission — a parliamentary body responsible for reviewing the budget bill as well as the five-year economic development plans — a stepwise approach must be used for the calculation of next year’s income tax. 

In doing so, salaries below 40 million rials ($160) per month are exempt from tax, incomes between 40 million rials and 320 million rials ($1,280) will be taxed at different rates of up to 30% and those earning over 320 million will be subject to a 35% income tax rate. 

Earlier in December 2020, the Guardians Council – a watchdog that ensures laws are in line with Islamic law and Iran’s Constitution – approved the parliament’s bill on revisions to Article 54 of Direct Tax Code, i.e., vacancy tax. 

The Iranian Parliament approved the proposal on August 5, based on which empty homes in cities with a population of over 100,000 will be taxed after four months based on their assessed rental income tax on a monthly basis. 

The owners of these properties will have to pay six times more than the rental income tax in the first year, 12 times more than the rental income tax in the second year and 18 times more than the rental income tax in the third year and the following years.

The final approval came after the council returned the vacancy tax bill to the parliament on August 12, citing "ambiguities" and calling for amendments to the document.

Abbasali Kadkhodaei, the council spokesman, tweeted that the parliament’s revised proposal on taxing empty homes was not found to be against Islamic law and Iran’s Constitution.

The INTA chief said infrastructures for the obligatory use of approved sales register machines by businesses are ready and the law will be enforced as of the fiscal month starting May 22. 

The Central Bank of Iran recently inactivated 2.5 million POS terminals across the country based on newly-passed tax regulations for POS terminals. 

Mehran Mahramian, the CBI deputy for innovative technologies, said, "Almost 4.7 million terminals and gateways had failed to provide the Iranian National Tax Administration with information needed to file tax returns. Their profile has been completed, validated and submitted to INTA," the CBI website quoted him as saying on Sunday. 

The plan to tax POS transactions became law two years ago, but has gone through ups and downs ostensibly due to technical issues. The law was passed to curb tax evasion by businesses, particularly in the high income brackets. 

 

INTA Budgetary Tax tax revenue