INTA Waives Penalties on Unpaid Tax

EghtesadOnline: Iranian National Tax Administration said Saturday that it is giving defaulters until the end of current calendar year (March 20) to clear their liabilities.

News ID: ۷۴۸۲۲۸

25 August 2019

According to INTA cheif, Omid Ali Parsa, plans call for waiving all penalties imposed on unpaid tax by the time the Persian year is out.

Parsa warned taxpayers that the waivers will not be extended after the deadline, the INTA website reported.

“Waivers are granted only for the current year with the aim of supporting private enterprise in the year known as the year of ‘boosting domestic production’ and in light of the special economic conditions,” Financial Tribune quoted him as saying.

The Islamic Revolution Leader Ayatollah Seyyed Ali Khamenei in his Nouroz (Persian New Year) message on March 21 designated the new fiscal year 1398 as the year of "Enhancing Domestic Production."

The senior official rejected rumors that INTA would grant all-out waivers every year, adding that “government support for the private sector is limited, conditioned and guaranteed”.

He pointed to a bylaw sent to INTA branches in the country asking them to caution taxpayers against the mistaken belief.

Parsa underscored INTA’s plan to reduce the authority of local taxmen in offering tax discounts.

“We have informed our offices that their authority regarding waivers for tax penalties will be limited in the coming year,” he stressed.

To encourage taxpayers to clear their dues on time, INTA has granted discounts to taxpayers it recognized “creditworthy” for years.

It authorized local tax offices to name a group of taxpayer as creditworthy upon their own discretion and grant them tax discounts.

Tightening Rules

Now INTA says it wants to tighten rules for taxpayers to become eligible for creditworthiness, apparently in an attempt to crack down on abuse by avaricious taxpayers to evade tax liabilities.

“Credible taxpayers should be identified based on hard evidence,” Parsa stressed.

Increasing tax revenue has gained traction with the government as partial solution to budget deficits emanating from a sharp decline in oil export revenues due to the harsh US economic sanctions.

Although there are no accurate figures on unpaid taxes it is estimated it to be in the region of 400 trillion rials ($3.3 billion).  This is almost 35% of the projected annual tax revenue.

In the budget for the current fiscal year 1,400 trillion rials ($10.9 billion) has been projected in taxes. The government, on more occasions than one, has said that  as a matter of policy tax should account for a bigger share of its revenue, especially during times of falling oil earnings and other financial constraints.