Lawmakers on Wednesday approved one more amendment to the next year’s (March 2019-20) budget bill that requires monitoring high-value banking transactions. The measures come as an attempt to fight money laundering and prevent tax evasion, the parliamentary news website ICANA reported.
As per the amendment, to help enhance transparency of banking transactions, combat money laundering and prevent tax evasion, the Central Bank of Iran is allowed to block bank accounts which lack a national ID number a month after the implementation of the new law.
Accordingly, banks and monetary and credit institutions are obliged to provide the Iranian National Tax Administration data about bank accounts and transactions (both interbank and intra-bank) of tax payers on a monthly basis.
After approval by the Money and Credit Council, a top monetary decision making body - the CBI is required to set a ceiling on money transfers and report all transactions above the threshold. The limits can be universal (same threshold for all) or subject to change on a case-by-case basis.
In order to transfer money above the specified level, applicants are required to mention the “reason” for transferring, and if necessary, provide documents to support their claim.
Supporting the motion, the Majlis Research Center says it will tighten the regulator’s supervision over cash flow that in turn mirrors the flow of goods and services in the country.
Among other things “the measure will prevent criminal activities related to money laundering and disruption in the economic system,” the parliamentary think tank said.
In order to transfer money above the specified level, applicants are required to mention the “reason” for transferring, and if necessary, provide documents to support their claim
The move will lead to significant rise in tax revenues while providing infrastructure for levying tax on foreign exchange, gold coins, and housing deals, which should eventually redirect liquidity into productive sectors.
According to MRC, in the past the regulator didn’t have access to data about inter-bank transactions. The new rules allow overseeing both interbank and intra-bank transactions.
Cash Subsidy
The parliament ratified a proposal to allocate 411 trillion rials ($3 billion) in cash and non-cash subsidy to households. The budget bill stipulates that as part of the Subsidy Reform Plan and as part of efforts to help promote social justice, alleviate poverty and expand healthcare, the subsidy resources will be deposited with the treasury to be paid to the needy.
Last week the Majlis obliged the government to identify and remove three-high income deciles from the cash subsidy list. Accordingly, government is obliged to use all data banks to identify and remove the three high-income deciles.
As part of the Subsidy Reform Plan, the previous government removed food and energy subsidies in 2010 and paid 455,000 rials ($9.8 calculated at the official forex rate and $3.5 in current open market rate) to each Iranian on a monthly basis. The controversial and costly policy has been retained by the Rouhani administration.
Lawmakers also voted to allocate 84 trillion rials ($623 million) to households whose monthly income is below the supportive level determined by two major Iranian relief organizations, namely State Welfare Organization and Imam Khomeini Relief Foundation.
It was agreed that the CBI lend 50 trillion rials in interest-free loans (Qarz-ol-hasana) to the two relief agencies. As per the budget bill, 35 trillion rials ($370 million) of the funds will go to the IKRF and 15 trillion rials to the SWO.
MPs voted on increasing marriage loans to 300 million rials ($2,200) per partner in the next fiscal year. The approved sum doubles the amount proposed by the government.
Interest-free loans are to be paid within a 5-year period and lenders are told to prioritize lending to the newlyweds.
Overtime the amount of marriage loans have increased proportionate to hikes in the inflation rate. The 30 million rials worth of loans 3 years ago tripled to 100 million rials in the same year and reached 150 million rials in the current fiscal (March 2018-19).
