Economy, Domestic Economy
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Market Transparency Key to Increasing Tax Revenues

Market Transparency Key to Increasing Tax Revenues Market Transparency Key to Increasing Tax Revenues

Head of the National Tax Administration, Ali Asgari says the government should increase the efficiency of tax collection services and add more transparency to the capital and commodity markets in order to increase its tax revenues.

“For the government to increase its tax revenues, the data systems in the country should become more transparent and accessible,” ISNA quoted him as saying.

In light of the recent drastic plunge in international oil prices, the Iranian government is trying to generate new sources of revenues mainly through taxes to replace its traditional oil revenues.

“The government raised as much as $17.5 billion (in official exchange rate) in taxes during the first ten months of the current year (ending March),” the official said.

The government revenues from direct taxes reached $10.6 billion in the first ten months of the current year. The amount accounts for 97% of the projected revenues, indicating a 47% increase compared with the similar period last year, he added.

The official also said that the government revenues from taxes on services and goods during the first ten months of the current year reached $6.9 billion, indicating an increase of 81% compared with the similar period last year and accounting for 94% of the projected revenues for this period.

He further predicted that 96 percent of projected tax revenues for this fiscal year will materialize before the end of the current fiscal year.

Calling for reforms in the government’s tax exemption and rebate policies, Asgari said: “The government has given up revenues worth over $4.5 billion in tax exemptions over the past one year.”

Asked if the value-added taxes (VAT) will lead to more inflation, he said: “The VAT has very little impact on low-income groups in the society as it is applied mainly to luxury products, while essential commodities such as meat and agricultural products are exempt.”

He also spoke of a relaxation of taxation rules granted to the manufacturing sector which enables manufacturers who do not make sufficient profits to pay their income tax in installments.”

Raising tax revenues is seen as a remedy to the country’s economy that has been crippled by unprecedented stagflation (high inflation and recession at the same time). Under such circumstances, economists argue that the government needs to identify tax evaders and make them pay their share to shore up the economy.

The government has recently introduced new amendment to the tax law according to which tax evaders will be subject to stricter punitive measures. Based on the new regulations, tax evaders would face additional penalties such as confiscation of their assets, blacklisting, and long-term financial restrictions.

Financialtribune.com