Head of the Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA) said it is the private sector that bears the brunt of higher taxes forecast in the government budgets.
Addressing chamber members n Sunday, Gholmahossein Shafe’i said that taxes supposed to be collected from the people and private businesses has increased substantially in the 2022-23 budget.
“Increase in taxes targeted at the private sector far outweighs those set for government and state-owned organizations and companies,” Shafe’i complained, referring to the next fiscal budget, the ICCIMA website reported.
Tax on non-government companies is predicted at 1,121 trillion rials ($4 billion), 146% higher on the mount in the current budget. This is while taxes on state-run companies are expected to grow 83% to reach 75 trillion rials ($267 million).
“Add to this the 70% increase in value added tax, which is directly imposed on the people and businesses,” the senior business leader said.
“These figures show that the main burden of realizing the government’s tax revenue falls on the shoulders of private enterprises.”
Besides the higher taxes, he complained that the government has ended the usual tax exemptions “exerting added pressure on private companies.”
The “abrupt elimination of tax incentives will negatively impact the predictability of the economy” and increase investment risks, he warned.
The government has decided to substantially increase its tax revenue in the fiscal year starting in March. It expects to earn 5,270 trillion rials ($18.8 billion) in taxes -- 95% over and above the target in the current year.
For the first time, the budget law calls for taxing owners of cars valued at or over 10 billion rials ($33,670) and owners of homes worth 100 billion rials $336,700)).
Notably, taxes on economic enterprises ware cut significantly in fiscal 2020-21 due to the Covid-19 pandemic and restrictions and shutdowns that battered most business.
In its appraisal of next year’s budget, the Majlis Research Center pointed to the ambitious tax projections as a major drawback.
