VAT, Withholding Tax Not Part of Astan Quds Exemptions

Exemptions granted to Astan Quds Razavi and its affiliated companies do not include withholding tax and value added tax, citing a decree by the Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei, the head of Iranian National Tax Administration, Kamel Taqavinejad, said. Astan Quds Razavi is an autonomous, charitable foundation, managing the Imam Reza (PBUH) shrine and 49 affiliated institutions and companies active in economic, social and educational fields.

 Its economic institutions and companies were brought under a single organization in the fiscal March 2004-5. These companies are active in the form of different holdings, namely pharmaceutical, financial, agriculture, development and construction, sugar and food industries, automotive, textile and husbandry.

In 2013, the parliament passed an initiative targeting autonomous institutions with the aim of promoting “educational justice” based on Article 30 of the Iranian Constitution by improving public school facilities located in deprived and rural areas.  

The resources were to be gained through taxation of exempted institutions, such as Astan Quds Razavi, the Executive Headquarters of Imam’s Directive and the subsidiaries of the Armed Forces of the Islamic Republic of Iran.

Despite the legal requirement, the trusteeship of Astan Quds has declined to pay taxes to help the Education Ministry. Finally, the Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei issued a decree last year stressed the continuity of tax exemptions for Astan Quds Razavi and its affiliated companies.  

“Of course, this edict does not include withholding tax and value added tax,” the leader’s decree read.  

According to INTA, less than 20% of taxpayers account for over 80% of country’s tax revenues and about 65% of all taxpayers enjoy various exemptions or pay less than 10 million rials ($266).

This is while the budget law of the current fiscal year (March 2017-18) projects larger revenues from taxes than oil exports (up to 70% of the overall revenues).

Members of the Iranian Parliament approved last December a ban on introducing “new” tax exemptions and discounts for the next five Iranian years to come.

The measure was proposed by the government as part of the sixth five-year development plan (2017-22) and aimed at reducing reliance on oil by boosting tax revenues.

The move, though the wording “new” would cast doubts and create ambiguities over its consequent implementation and perhaps give rise to misinterpretation, infringement and abuse, has had mixed reactions on the part of economists and experts ever since it was passed.