An estimated nine million point-of-sale terminals are about to be suspended by the Iranian National Tax Administration because their operators failed to file tax returns, an official with INTA said.
“The POS terminals will be detached from the payment network if their owners fail to register their identity information with INTA by Feb.19,” Mohammad Barzegari was quoted as saying by IRIB news.
INTA in coordination with the Central Bank of Iran decided last year to connect payment gateways to the national tax system to curb tax evasion by businesses, particularly in the high income brackets.
Applicants for POS or other payment gateways are required to first file tax returns and those already owning the payment machine are automatically eligible for tax.
Most business owners have not filed their tax return for their payment gateways fearing higher taxes.
Barzegari said that this is a false perception, adding that the aim is to improve financial transparency. Referring to the Direct Tax Act, he said tax is levied on profit not transactions.
In addition, policymakers say the rules are expected to “significantly curb” illegal activities using rented payment gateways and play a key role in monitoring fraud, money laundering and online betting because owners of the gateways are held accountable and must pay tax.
Following reports of rising tax evasion and strange tax exemptions, the government is struggling to curb rampant tax dodging that costs the country billions of dollars.
Controlling POS devices in and outside Iran and tightening supervision over dubious bank transactions is on the government agenda following collaboration between administrative bodies, namely the CBI, the Ministry of Information and Communications Technology and INTA.
The plan is in the framework of the so-called ‘innovative taxation’ system announced by INTA. It says transition from electronic to innovative taxation is to help improve the tax regime, help government funding, reduce overreliance on oil export revenue, promote fair tax collection and fight fraud.
POS terminals are the most popular payment instrument in Iran. Data released by the Shaparak, the nationwide payment settlement network, over the types of payment instruments used in the month to Dec 21 show POS devices were at the top with 75.93%
