INTA Earns $9 Billion in Tax Revenues in Fiscal 2022-23

EghtesadOnline: ax earnings account for 103% of the figure projected in the previous year’s budget and have increased by 54% compared to the preceding year.

News ID: ۷۵۲۴۲۸

19 April 2023

The Iranian National Tax Administration earned 4,700 trillion rials (over $9 billion) in tax income during the last fiscal year that ended on March 20, 2023, according to the head of INTA’s Planning and Statistics Group.

“The earnings account for 103% of the figure projected in the budget and mark an increase of 54% compared to the preceding year,” Mojtaba Amiri was also quoted as saying by IRNA.

“From the total income, more than 2,930 trillion rials pertain to direct taxes, which account for 70% of the figure estimated in the annual budget and register a 36% rise compared to the year before,” he added.

The three sub-categories of direct taxes, namely tax on legal entities, income tax and capital tax stood at 1,890 trillion rials, 849 trillion rials, and 190 trillion rials respectively.

“A total of 1,760 trillion rials [from the total income] pertain to tax on goods and services, accounting for 84% of the budget and registering a 51% rise compared to the year before,” he said, concluding his remarks by saying around 1,100 trillion rials were paid to municipalities and rural governorates last year, registering a 170% rise compared to the year before.

Davoud Manzour, the former head of INTA, recently said the identification of new taxpayers and prevention of tax evasion make up 60% of the rise in the government’s tax income.

On the remaining 40%, he said part of the increase (in tax income) comes with rising commodity prices, as value added tax is an important form of taxation and the 9% VAT evidently increases in volume in line with rising prices.

Manzour noted that INTA’s estimates show about 350,000 companies and three million individuals failed to submit their tax declarations last year.

Stressing that the government pursues a policy of trusting taxpayers’ declarations, he added that only 5-10% of all declarations will be reviewed by the tax agency.

Allaying concerns about a possible increase in taxes on businesses and sales outlets, Mehdi Movahedi, the head of Fiscal Planning Center of INTA, recently said there will be no new tax bases, or rise in tax rates.

“A significant part of the rise [in tax income] owes to high inflation, which is expected to stick above 40%,” he was quoted as saying by IRIB News.

Stressing that tax rates will remain the same as past year’s, he said efforts have been made to minimize pressure on production and real economic sectors.

“Tax income has a 50% share in funding the government’s expenditure. We plan to maintain this share in the year ahead,” he added.

Echoing Manzour’s comments, Movahedi explained that INTA is looking to raise its income by collecting tax arrears and stemming tax evasions.

The Ministry of Economic Affairs and Finance had announced in 2022 new measures taken by the government, including connecting nine million point-of-sale (POS) terminals to the national taxation system and activating another nine million POS terminals.

“As a result, the number of taxpayers increased by three million by August 22 … The number of tax declarations submitted to the Iranian National Tax Administration increased from 3 million to 4.5 million [showing an over 50% rise] by July 22,” he said.

The Comprehensive Taxpayers System, which is the main platform for the implementation of the law of shopping terminals, requires all sales and purchases to be registered in the form of electronic invoices.

The government says it aims to increase the share of taxes and reduce the share of oil revenues in the public budget, as the income from the sale of natural resources, including oil, gas and mines, is supposed to be spent on the country’s development instead of the current budget.

Meanwhile, the Budget Law stipulates that social media influencers with more than 500,000 followers who generate income from commercial activities will be subjected to income tax.

Economy Minister Ehsan Khandouzi earlier communicated the directive on taxing influencers to the Iranian National Tax Administration.

“For INTA, it is not important whether the owner of the bank account is a dairy seller, or a celebrity, or an athlete. Artists will be exempt from tax, if they earn less than 2,000 million rials [$4,484 per year]. All other celebrities who earn more must be taxed,” Manzour has been quoted as saying.

As per a new approach employed by INTA, whistleblowing on tax evaders and other tax violations will be incentivized. The whistleblowing guidelines were communicated to tax offices on Feb. 27.

The public has been asked to log on to Intamedia.ir and report tax schemes and evasions, and enjoy a special reward.

INTA is expecting to add 900 trillion rials ($2 billion) to its income in the new fiscal year (March 2023-24) by stemming tax evasion, Manzour said earlier.

“We expect our tax income to account for 65% of government revenues,” he was quoted as saying by IRIB News.

According to the former INTA chief, the government forwent 3,400 trillion rials ($7.62 billion) worth of tax in the fiscal 2021-22 due to exemptions, as the total volume of tax earnings during the period stood at 3,060 trillion rials ($6.86 billion).