An estimated 9.3 million POS terminals are so far linked to the tax department, head of the Iranian National Tax Administration (INTA) said.
“This came after two years of collaboration between INTA, the Central Bank of Iran and e-payment systems. The payment gateway and taxpayer system regulation came into effect last year through which close to 18.7 million POS terminals were identified.
The rest will be connected progressively,” Davoud Manzour was quoted by the news portal of Iran Chamber of Commerce, Industries, Mines and Agriculture as saying.
This, he noted, is the first step in effectively improving the tax system and when it covers all economic and financial activity there will be no need for (filing) tax returns.
“Bank statements and invoices will be electronically transferred to the payment gateways and the tax payment system and placed on individual dashboards, accessible via taxpayers' national IDs. This will curb the bureaucracy and there would be no need for audit and verification.”
Manzour said that as of Oct 23, companies listed in the Tehran Stock Exchange and Iran Fara Bourse, Tehran's junior equity exchange, will be the first that must abide by the payment gateways and taxpayer system regulations, which means they have to issue electronic bank statements. State-owned companies will be next to join from December, and gradually all businesses and economic sectors have to play by the rules, he said.
“With the new regulations coming into effect, we will have accurate tax collections based on verified data instead of the [present] system of negotiating. This will help improve transparency of the tax system.”
With the INTA measures and rules the tax authority’s overview of economic activities in the country has improved, the official said.
“Our aim is to remove pressure on the official financial and economic sectors and concentrate on the unofficial sector and tax evaders.”
Unfair and Unclear Taxation System
Arash Alavi, a chamber member, told IRNA the tax system in Iran is unfair and discriminatory.
“What we have seen for years is that the manufactures, which create the utmost revenue and jobs have to pay the most tax. The payment gateways and taxpayer system is designed in a way that identifies taxpayers from the beginning of the production chain and services to the last loop of sales and purchases. We hope that with this system gaining momentum, taxation will become fair and transparent as it is apparently meant to be.”
With the latest measures, bank accounts connected to the POS terminals are considered business accounts and money going into such accounts are regarded as taxable income.
Last month the Ministry of Economic Affairs and Finance announced that business and personal bank accounts will be compartmentalized to implement rules related to payment gateways and taxation.
It noted that the government is committed to identify tax evaders and collect the government’s fair share, relieving pressure hitherto on the official economic sector.
Based on the Money and Credit Council’s new enactment, differentiating between business and personal bank accounts will affect those who have been evading taxes using a variety of pretexts. The Economy Ministry says that the new regulations will not undermine businesses already paying tax.
If INTA designates an account as a business account, enough time will be allowed account holder to prove it otherwise by showing valid documents, the ministry said.
