A total of 1,380 trillion rials ($4.9 billion) in tax revenues were collected over the first half of the current fiscal year (March 21-Sept. 22), indicating a 62% increase compared with the corresponding period of last year, Mohammad Masihi, the deputy head of the Iranian National Tax Administration said on Wednesday.
“Tax collection reached 101% of the government’s revenue targeted in the Budget Law of fiscal 2021-22, because of focusing on key tax cases, monitoring of suspicious banking transactions, combating shell companies under a tax evasion program, implementing Article 97 [acceptance of self-declaration of tax returns of nearly 50% of economic players] and enhancing tax processes,” he was quoted as saying by ISNA.
INTA earned 30 trillion rials [$107 million] from stock market trading over the six-month period compared with 100 trillion rials [$357 million] in H1 fiscal 2020-21,” the official added.
A total of 1,925 trillion rials ($6.8 billion) in tax were collected in the last fiscal year (March 2020-21), indicating a 37% increase compared with the year before.
According to Masihi, the government earned 107% of the budgetary expected income from taxation in the last fiscal year.
The government’s tax revenues consist of returns from “direct taxation” and “tax on goods and services”. Direct taxes include three groups of “tax on legal entities”, “income tax” and “wealth tax”.
Direct tax earnings stood at 1,190 trillion rials ($4.2 billion) in the year ending March 20, to account for 136% of the projected income in the budget law and 46% more than direct tax revenues of the preceding year (March 2019-20).
“Tax on goods and services generated 735 trillion rials [$2.6 billion] for the government, accounting for 80% of the expected budgetary figure and 23% more than the corresponding revenues in the previous fiscal year,” he was quoted as saying by Fars News Agency.
Referring to the sub-categories of direct tax revenues, the official said, taxation of legal entities generated 560 trillion rials ($2 billion) during the period under review, indicating a 27% growth year-on-year.
A total of 395 trillion rials ($1.4 billion) in income tax were collected as well, registering a 36% year-on-year rise.
Last fiscal year’s wealth tax income stood at 232 trillion rials ($830 million), showing a 178% increase compared with the year before.
The official blamed the coronavirus pandemic and decline in transportation and fuel consumption for a 14% decrease in petroleum tax revenues and said INTA collected 60 trillion rials ($214 million) from the taxation of petroleum products last year.
“Self-declaration of tax returns accounted for 70% of the country’s tax revenues, which allowed INTA to focus on improving tax collection from major taxable persons. INTA also managed to collect 100 trillion rials [$357 million] from overdue tax returns,” Omid Ali Parsa, the head of the Iranian National Tax Administration, was quoted as saying by Mehr News Agency recently.
Parsa put the aggregate volume of tax evasion and tax avoidance in Iran at 1,000 trillion rials ($3.5 billion) per year.
“Tax gap [the difference between the amount of tax that should be paid to INTA and what is actually collected] is being driven by 500 trillion rials ($1.7 billion) of tax evasion and as much worth of tax avoidance,” he was quoted as saying by ILNA on Wednesday.
“The government should either double taxation or combat tax evasion to increase the share of tax revenues in GDP from 6-7%.”
Adding that the obligatory use of approved point-of-sale machines by businesses will be enforced by Jan. 20, 2022, the official said, “One million point-of-sale systems will be connected to INTA. At present, a total of 840,000 devices have been linked to the administration’s database; they register two million sales transactions every night.”
The INTA chief noted that 50% of self-declared tax returns have been accepted without being investigated by INTA; they were filed by 1.6 million business owners.
Parsa also said 200 trillion rials ($715 million) in tax arrears assessed over past two years have not been paid.
