Bank Accounts to Ease the Job of the Taxman: Gov’t

It said the government is resolute in identifying tax evaders and “collecting its share” while easing pressure on the beleaguered economy, IRNA reported.  

To this end, the relevant organizations are obliged to connect POS terminals used by businesses to the tax office database. This is the first phase, the second being the separation of bank accounts used by businesses for their business needs from regular accounts, the news agency quoted the ministry as saying.

The CBI recently instructed banks to separate the accounts that owners use for business needs from regular accounts. 

Based on a decision by the Money and Credit Council, differentiating between business and personal bank accounts is with the primary goal of identifying those who use a variety of ways to deceive the taxman and defraud the government. 

Officials have tried to assure the public that the new measures will have no impact on law-abiding businesses in the official sector with clean tax records.

Proposed Procedures 

Earlier this month, the CBI announced procedures for banks and the tax authority to differentiate personal and business bank accounts. 

It noted that there are various methods for doing so, but banks must make certain two conditions before tagging a customer’s account as business account.

Firstly, the number of times deposits are made into an account, which must exceed 100 a month. Second, the amount(s), which must be more than 3.5 billion rials per month. Both conditions must be met concurrently for any account to be considered as being related to business and trade.

However, even if both these conditions are upheld, it doesn’t necessarily render a bank account as business. “The bank must also decide on the nature of the account after additional information,” the regulator has said. 

Surveys show that a small percentage, less than 2%, of bank accounts may fall into the business category. 

Given the new developments, an estimated 8.3 million POS terminals have been connected to tax filings. Bank accounts connected to these gateways are automatically recognized as business accounts and money going therein are regarded as taxable income.

If the Iranian National Tax Administration mistakenly rules any account as business account, owners have the right to demand a review by providing proper documents. 

Improving Transparency

The separation of bank accounts, the CBI says, also seeks to improve economic and financial transparency, which is “in the interest of business owners”. 

“Higher online money transfer ceilings, easing procedures for issuing checkbooks and the possibility of transferring big amounts without the need to show documents to back such transfers are incentives”, Abouzar Soroush, the CBI deputy for supervisory affairs said earlier. 

Over the years the CBI has announced rules to improve oversight of bank performance. It said the measures, among other things, are to ensure anti-money laundering rules are upheld, curb tax evasion and curtail speculation in financial markets, namely gold and forex.