An estimated 18,000 owners of luxury car paid 1.3 trillion rials ($4.31 million) in tax on their cars, the Iranian National Tax Administration’s (INTA) deputy chief said.
“Tax has been levied on 178,000 high-end car owners. After sending them SMS regarding tax payments, so far almost 68,000 logged on my.tax.gov.ir. About 18,000 of the car owners paid their dues amounting 1.3 trillion rials ($4.31 million),” Afshin Khodamoradi was quoted as saying.
Luxury car owners have been placed in the higher tax bracket based on the fiscal 2021-22 budget law, Khodamoradi said.
After the regulatory framework was in place, the necessary official measures were taken to inform the owners of high-end vehicles. According to INTA documents, the 178,000 apparently affluent owners of costly cars in total must pay 20.3 trillion rials ($67.3 million) in tax for this year, local media reported.
The taxman has said if a car owned by any Iranian is worth 10 billion rials ($33,167) and above, he/she must pay this tax.
Those who are subject to the luxury auto tax and have received the SMS, they should register with the national portal of electronic tax services, my.tax.gov.ir, to get full details of their auto tax situation and pay.
Regarding the potential taxpayers who have objections to the high tax and ways to announce their complaint, the official said: “They should log in the special site of the national portal of electronic tax services and register their compliant, which is foreseen in the tax payment process."
He revealed that almost 14,800 auto owners have protested and their objections are being reviewed by the relevant INTA office.
According to Ali Rostampour, anr INTA official, cars worth 10-15 billion rials should pay 1% tax, those valued at 15-30 billion rials 2%, cars worth 30-45 billion rials 3% and all others worth over and above 4.5 billion rials must pay 4%.
The government banned car imports in 2018 and autos now subject to the much higher taxes were manufactured in that year or earlier. However, the ban turned out to be highly contentious, in that the prices of locally-made inferior quality gas-guzzlers shot up and continue to rise at unprecedented speed
Based on rates envisaged in last year’s government budget, cars with open market value (OMV) exceeding 20 billion ($66,334) are liable for 150 million rials ($497) tax a year.
Jahangir Rahimi, another INTA official said for year that passes the tax is reduced by 10% and the process continues for a maximum of 60% or six years.
According to a report released by INTA in January, a total of 547,692 cars owned by 272,498 people were liable to pay the luxury tax at the time.
Data has it that nearly 45% of luxury cars and 48% of people who were subject to higher taxes from March 2021-22 were in Tehran and largely in the upscale northern areas of the capital.
INTA has said that only natural persons owning the luxury cars are being taxed and legal persons such as ministers, government officials and lawmakers are exempt.
The taxman has not given any valid, or otherwise, reason why these exemptions have been granted. After all Iranians, like all law-abiding people in the world, understandably expect the state and government officials, especially those at the higher echelons of power, to lead by example.
It is noteworthy that the government banned car imports in 2018 and autos now subjected to the higher tax were manufactured in that year or earlier. The ban turned out to be highly controversial, in that the prices of locally-made inferior quality gas-guzzlers shot up and continue to rise at unprecedented speed.
The other, and probably more troubling, impact of the contentious import ban has been that domestic carmakers over the years have performed in an utterly unprofessional manner in terms of mismanagement, financial transparency, declining quality and rising prices.
Their mangers also are oblivious to persistent public demand to change course and do as other car companies do in the region and beyond.
Media reports in the past several months say the government has decided to lift the car import ban this year of which five months have already passed. It has also been reported that if and when the ban is lifted import of low-cost vehicles would be encouraged and prioritized.
"Under the new regulations, in addition to the top two deciles, car imports have also been considered for low-income deciles. Special incentives, including lower tariffs, will be levied to importers of such cars," Manouchehr Manteqi, deputy industries minister for transportation affairs, was quoted as saying by Donyaye Khodro website.
He added that the new regulations focus on key issues like after-sales service and technology transfer alongside imports.
