The plan to tax transactions via point-of-sale machines is one step closer to realization as the Central Bank of Iran and Iranian National Tax Administration give it the finishing touches.
Mehran Maharamian, the CBI's vice governor for IT affairs said tweeted Wednesday that rules that stipulate tax on POS transactions has now "entered the implementation phase" after months of planning and coordination with INTA, the news agency of the Monetary and Banking Research Institute reported.
The plan to levy tax on POS transactions became law two years ago but has gone through tweaks and adjustments apparently lacking technical ways and means.
The law was passed to fight tax evasion by businesses particularly in the high income brackets like lawyers, physicians and real estate agents.
Guilds have long been under criticism for asking cash for their services and refusing to work through the legal banking process. This has rendered tracing their income difficult if not impossible. Officials say by looking into transactions via POS devices the taxman can verify the veracity of tax returns.
Moharamian said those who owned a POS machine but were not subject to taxation henceforth will have to pay.
"Tax dossiers have been opened for all owners of POS devices who were not among taxpayers," he wrote in his twitter account, adding that the central bank and INTA are collaborating to prevent tax evasion.
With reports of rampant tax evasion, economic and law enforcement authorities are struggling to curb the financial loss. Organizing POS devices in and outside Iran and tightening supervision on dubious bank transactions were put on the agenda of a group comprising administrative bodies, namely the CBI, the Ministry of Information and Communications Technology, law enforcement agencies and INTA.
Cooperation between INTA and CBI is critical because controls over POS devices are beyond INTA’s jurisdiction and the responsibility of Shaparak, the nationwide electronic payment settlement network affiliated to the CBI.
Smart Taxation
The new plan is in line with the so-called ‘smart taxation’ system announced by INTA. It says transition from electronic to smart taxation is a process to develop the tax system, help fund the government’s public budget, reduce reliance on oil revenue, promote fair collection and fight tax evasion.
The government earned 852.23 trillion rials ($3.2 billion) in taxes in the first half of the current fiscal year (March 20-Sept. 21), INTA said.
Government tax revenue includes direct taxation and from goods and services. Direct taxes have three subgroups: tax on legal entities, income tax and wealth tax.
Overall earnings from direct tax reached 549.55 trillion rials ($1.99b) of which tax from legal entities amounted to 227.49 trillion rials ($827.23 million),
Revenue from income tax was 192.65 trillion rials ($700.5m) and wealth tax generated 129.4 trillion rials ($470.5m).
