Monthly Tax Collection Tops $820m

The Iranian National Tax Administration collected 430 trillion rials ($826 million) during the first month of the current fiscal year (started March 21), 49% more than in the corresponding period of last year, according to the INTA chief.
“Direct taxes amounting to 190 trillion rials [$365 million] and tax on goods worth 240 trillion rials [$461 million], including value added tax, accounted for 44% and 56% of total tax collections during the period,” Mohammad Hadi Sobhanian was also quoted as saying by IRNA.
INTA announced this week that all takeaway restaurants and coffee shops will be entitled to VAT as of June 22.
Also, Capital Gains Tax, which had been the topic of many discussions for a long time, was finally approved by the parliament. CGT is a component of income tax levied on the income from the transfer of movable or immovable capital assets, tangible or intangible. The purpose of this type of tax is to regulate the activities of various economic sectors, limit speculative practices, increase government revenues, create social justice and reduce income gap. 
Some radical supporters of this type of ta, even talk of its effect on bringing down inflation, stabilizing the foreign currency market and increasing investment and economic growth. 

Fiscal 2022-23 in Review

INTA earned 4,700 trillion rials (over $9 billion) in tax income during the last fiscal year (March 2022-23), according to the head of INTA’s Planning and Statistics Group.
“The earning accounts for 103% of the figure estimated in the budget and have increased by 54% compared to the preceding year,” Mojtaba Amiri was also quoted as saying by IRNA.
From the total income, more than 2,930 trillion rials [$5.63 billion] are related to direct taxes, accounting for 70% of the figure estimated in the annual budget, and registering a 36% rise compared to the year before, he added.
According to Amiri, the three sub-categories of direct taxes, namely tax on legal entities, income tax and capital tax, stood at 1,890 trillion rials ($3.63 billion), 849 trillion rials ($1.63 billion) and 190 trillion rials ($365 million) respectively.
“Around 1,760 trillion rials [$1.38 billion] pertain to tax on goods and services, accounting for 84% of the budget, and registering a 51% rise compared to the year before,” he said.

Sources of Rising Tax Income

Davoud Manzour, the former head of INTA, said new taxpayers identified by the administration and the augmentation of resources by stemming tax evasion make up 60% of the rise in the government’s tax income.
On the remaining 40%, he said part of the increase in tax income comes from rising commodity prices, as the 9% value added tax is an important form of taxation that increases with rising prices.
Another aspect of the rise in tax income, he added, is funded by manufacturing units’ exit from recession, which generate more value added.
Manzour noted that INTA came up with its own estimates about 350,000 companies as well as three million individuals who failed to submit their tax declarations last year.
Stressing that the government pursues a policy of trusting taxpayers’ declarations, he added that only 5-10% of all declarations will be reviewed by the taxman.
Allaying concerns about a possible increase in taxes on businesses and salespeople, Mehdi Movahedi, the head of Fiscal Planning Center of INTA, said there will be no new tax bases or rise in tax rates.
“A significant part of the rise [in tax income] owes to high inflation that is expected to stick above 40%,” he was quoted as saying by IRIB News.
Noting that tax rates will remain the same as last year’s, he said efforts have been made to minimize pressure on the production and real economic sectors.
“Tax income has a 50% share in funding the government’s expenditure. We plan to maintain this share in the new fiscal year [March 2023-24],” he added.
Echoing Manzour’s comments, Movahedi explained that INTA is looking to raise its income by collecting tax arrears and stemming tax evasions.
The Ministry of Economic Affairs and Finance announced earlier in 2022 new measures taken by the government, including connecting nine million point-of-sale (POS) terminals to the national taxation system and activating another nine million POS terminals. 
“As such, the number of taxpayers increased by three million by August 22 … The number of tax declarations submitted to the Iranian National Tax Administration increased from three million to 4.5 million (more than 50% rise) by July 22.”
Moreover, the Comprehensive Taxpayers System, which is the main platform for the implementation of the law of shopping terminals, requires all sales and purchases to be registered in the form of electronic invoices.
The government says it aims to increase the share of taxes and reduce the share of oil revenues in the public budget as the income from the sale of natural resources, including oil, gas and mines, is supposed to be spent on the development of the country instead of being injected into the current budget.
Moreover, the Budget Law stipulates that social media influencers with more than 500,000 followers who generate income from commercial activities will be subject to income tax. 
Economy Minister Ehasan Khandouzi earlier communicated the directive on taxing influencers to the Iranian National Tax Administration.
And as per a new approach employed by INTA, whistle blowing on tax evaders and other tax violations will be incentivized. The whistle blowing guidelines were communicated to tax offices on Feb. 27. 
The public has been asked to log on www.intamedia.ir and report tax schemes and evasions and enjoy a special reward.
INTA is expecting to add 900 trillion rials ($1.7 billion) to its income in the new fiscal year (March 2023-24) by stemming tax evasion, Manzour said earlier.
“We expect our tax income to account for 65% of government revenues,” he said.