INTA Penalty Relief Extended Through 2020-21

“The ministry has been given the blessing of the Supreme Council of Economic Coordination, chaired by the heads of three branches of government, to extend last year’s penalty relief through the fiscal 2020-21, not only for manufacturing enterprises but also for businesses providing services, given the situation created by the outbreak of coronavirus,” he said. 

Noting that last year’s penalty relief generated 100,000 billion rials ($550 million) for the government, the official said a 1.5% tax discount for each month will also be available to voluntary payments before the tax is due, i.e. 18% of taxpayers’ end-of-year tax liability, IRNA reported. 

To fight rampant tax evasion and fraud, the Iranian National Tax Administration will henceforth focus on minority taxpayers who are responsible for the majority of unpaid taxes, the head of INTA said recently.

Speaking on state TV late on Saturday, Omid Ali Parsa added that estimates suggest there are about 400-450 trillion rials ($2.2 billion-$2.5 billion) in unpaid taxes.

The senior official said a small group of tax dodgers accounts for a large portion of unpaid taxes. 

“INTA is concentrating on almost 4,000 people who are wealthy and have very high incomes but pay less tax,” Fars News Agency quoted him as saying. 

Parsa said INTA is taking measures to collect unpaid taxes based on evidence and data about taxpayers’ revenue sources, warning administrative bodies that “the government may suspend their funding if they refuse to share information (on taxpayers) with INTA”. 

He stressed that relevant administrative bodies should provide INTA full details about taxpayers’ status. 

“INTA used to offer major concessions with regard to tax liabilities,” he recalled, adding that those days are over and there will be no flexibility toward tax dodgers and defaulters.

Parsa said INTA will soon publish the names of bodies that have failed to cooperate with the country’s highest tax authority. 

He spoke about a plan to scrap a tax declaration method known as “estimated assessment procedure”, saying that “this is the demand of most taxpayers and we are trying to put on end to this before the year is out”.  

The estimated assessment procedure is used when the taxpayer fails or is late in filing his tax returns. The tax authority unilaterally assesses the estimated tax and informs the person or company to pay. The estimated assessment procedure puts the burden of proof on the taxpayer.

Mahmoud Alizadeh, INTA’s deputy for legal affairs, said on Sunday that about 20% of taxpayers account for 80% of the country’s total tax revenue. 

“Therefore, it would not be tenable to focus on the 80% of those who pay less tax. It is better if we concentrate on the 20% who are liable to pay 80% of the taxes,” he said. 

Amid the economic slowdown, coronavirus lockdowns and an unprecedented decline in oil exports, the government is counting on taxes as a major source of revenue. As such, new tax categories have been introduced to curb the government’s unending budget deficits.

In recent years, successive governments in Tehran have said in no uncertain terms that the perilous overreliance on unstable oil income has to end sooner than later. Senior officials have been quoted as saying that the economy should operate on tax money. 

However, how the incumbent government intends to raise taxes and compel businesses to pay their fair share under the present dire conditions is not known.

National tax revenue increased by 31% in the last fiscal year (March 2019-20) compared to the year before to reach 1,430 trillion rials ($8 billion). 

The government has forecast 1,800 trillion rials [$10.2 billion] in tax revenues in the current fiscal year that ends next March.