Iran Tax Administration says it is determined to implement the law to tax transactions via point-of-sale (POS) terminals by next March.
"We have reviewed the challenges and opportunities in implementing the law in collaboration with officials from the ICT Ministry, the Central Bank of Iran and other relevant organizations…It was agreed that the shortcomings be addressed by the end of the current fiscal year (March 2023)," Davood Manzour, the INTA chief was quoted as saying by way2pay.ir.
"This move is a priority for this year," he said, while accusing the former administration of procrastination.
INTA in coordination with the CBI decided last year to connect payment gateways to the national tax system to curb fraud and tax evasion by businesses, particularly in the high income brackets.
Applicants for POS or other payment gateways are required to first file tax returns and those already owning the payment machine are automatically taxed.
Most business owners have not filed their tax return for their payment gateways fearing higher taxes.
Some guilds are censured for demanding cash from customers and evading banking channels to avoid paying tax. This has rendered tracking their income difficult if not impossible. Officials say by looking into POS transactions the veracity of tax returns would be enhanced.
So far 15 guilds, including 50 occupations, are obliged to use POS machines and issue a receipt when selling goods and services.
In addition, policymakers say the rules are expected to “significantly curb” illegal activities using rented payment gateways and play a key role in monitoring fraud, money laundering and online betting because owners of the gateways are legally accountable and must pay tax.
Following reports of rising tax evasion and strange tax exemptions, the government is struggling to curb rampant tax dodging that costs the country billions of dollars.
Controlling POS devices in and outside Iran and tightening supervision over dubious bank transactions is on the government agenda following collaboration between administrative bodies, namely the CBI, the Ministry of Information and Communications Technology and INTA.
The plan is in the framework of the so-called ‘innovative taxation’ system announced by INTA. It says transition from electronic to innovative taxation is to help improve the tax regime, help government funding, reduce overreliance on oil export revenue, promote fair tax collection and fight fraud.
POS is the most popular payment instrument in Iran. Data released by the Shaparak, the nationwide payment settlement network, over the types of payment instruments used in the month to Dec 21 show POS devices topped the list with 75.9%
