The Central Bank of Iran's plan of action separating commercial bank accounts from personal accounts are moving ahead in cooperation with the tax authority, Hassan Mirzapour, the head of CBI's software department, said.
"In the last four months 12.3 million commercial accounts have been identified, of which 2.3 million belong to legal entities and 10 million to natural persons," IBENA quoted Mirzapour as saying.
He stressed the need for accelerating the process of the remaining 15 banks joining the system of separating commercial and non-commercial accounts.
"So far 15 banks have yet to join the system. The delay has created difficulties in taxing commercial accounts.” He emphasized the need for such banks to join the system as soon as possible to ensure that the banking network in its entirety is in the a/c separation project.
The tax authority and the CBI need to work in tandem with these banks to address any technical or administrative issues they may face and help them join the system sooner rather than later, he was quoted as saying.
He added that the tax authority will create a tax file for each account after the necessary investigations and will notify the central bank. The CBI will inform the relevant bank of the account's commercial status."
According to the head of the CBI software department, incentives have been announced for commercial a/cs, such as facilitating the issuance of checkbooks, increasing the withdrawal limit and reducing fees for some banking services.
The regulator last year instructed banks to separate the accounts that business owners use for their work from regular accounts. The CBI last September set procedures for banks and the tax authority to differentiate the bank accounts of businesses and personal accounts.
The project to separate commercial and non-commercial accounts is an essential part of Iran's efforts to strengthen its financial system, increase tax revenues, and combat money laundering. The project has been underway for several years and has faced numerous challenges due to technical and administrative drawbacks.
A Step Forward
The successful separation of commercial and non-commercial accounts is seen as an achievement for Iran's financial sector. It will help the tax authority to identify commercial transactions more accurately and enforce tax regulations.
Moreover, it will improve the transparency and credibility of the key banking industry, which is crucial for attracting foreign investment and interacting with international financial transactions.
Elaborating on the rules, Mostafa Qamari-Vafa, head of the CBI public relations department, said there are various methods for categorizing bank accounts. However, lenders must make certain two conditions before tagging a customer account as business.
“First is the number of times deposits go into each account, which must exceed 100 a month. Second, the amount(s) must be more than 3.5 billion rials in a month,” Qamari-Vafa said.
He reiterated that both conditions “must be met simultaneously” to be identified as a business account.
“For example, if the deposit is 10 billion rials but the number of deposits is less than 100, the account is categorized as business”.
The criteria for calculating transactions is only the number of “deposit transactions” and not transactions for purchase, money transfer and paying bills.
Even if both conditions are upheld, it doesn’t necessarily render a bank account as business. “The bank should decide on the nature of the account after additional information,” he said without elaborating.
Past surveys show that a small percentage, less than 2%, of bank accounts may fall into the business category, the official said.
