Economy, Domestic Economy
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Torkan Proposes Higher Taxes, Tariffs

Torkan Proposes Higher Taxes, TariffsTorkan Proposes Higher Taxes, Tariffs

The country’s current budget must be based on revenues earned from taxes and duties in order to offset the oil revenue loss caused by the fall in the international oil market, senior presidential advisor Akbar Torkan said on Thursday.

“Tax revenues account for 8% of the country’s GDP, while in other countries they account for 15% of the GDP,” ISNA quoted Torkan as saying, as he was addressing a conference on technical and engineering services exports held in the city of Mashhad.

The government is trying to generate new revenue sources mainly through the taxes and non-oil exports to replace its traditional oil revenues – a shaky source that is proven to be highly susceptible to international volatilities.

Tax evasion is a rampant practice in Iran. According to Iranian officials, nearly 43 percent of the economy is currently not being taxed. To counter tax evasion, the government has recently announced that it is about to come up with a full-blown program, known as Comprehensive Tax Plan, to make all taxpayers’ information transparent.  

The plan, which is to come into effect by the end of the next year (March 2016), is expected to increase tax revenues, simplify tax calculation methods, introduce double taxation, organize the tax system, regulate tax exemptions and prevent tax evasion.

In addition to the tax revenues, the government is also trying to boost its non-oil export, which is seen as an untapped field that can help the government make substantial income annually.

“Petrochemical, steel, auto and cement are Iran’s major non-oil exports,” Torkan said, noting that these industries are able to generate substantial revenues that can be replaced with oil revenues upon which Iran’s annual budget is highly reliant.

Financialtribune.com