Iran Gov't Tax Revenues Increase 10%

EghtesadOnline: Tax revenues during the first four months of the current Iranian year (started March 21, 2018) increased by 10% compared to last year's corresponding period to reach 300 trillion rials ($6.81 billion), the head of the Iranian National Tax Administration said.

News ID: ۷۸۳۴۹۶

31 July 2018

Kamel Taqavinejad's comments came after Economy Minister Masoud Karbasian recently said about 2,500 cases of tax evasion and 3,000 shell companies have been identified, ILNA reported.

Noting that the ministry will not go easy on tax evaders, Karbasian said financial transparency needs to be coupled with alleviating pressure on productive private sector and entrepreneurs to improve the business environment, according to Financial Tribune.

“To this end, the Economy Ministry is making efforts to identify new taxpayers, prevent tax evasion and offer electronic services to facilitate taxation,” IRNA also quoted the minister as saying.

According to Rasoul Saraeian, the head of Information Technology Organization of Iran, 100% of tax returns this year were carried out electronically.

Referring to the outstanding improvement of Iran’s ranking in the United Nations’ latest E-Government Development Index, he said, “Higher levels of e-government development can improve transparency and keep a check on rent-seeking behaviors.”

Iran’s place in the United Nations' EGDI, which measures the use of information and communications technologies to deliver public services, improved 20 spots from 106th in 2016 to 86th in 2018.

Moreover, Iran was one of the 17 countries among the 193 UN member states that transitioned from middle to high EGDI level group.

Taqavinejad also noted that more than 4.86 million tax returns were submitted this year, of which 4.16 million were job- and auto-related files.

“The administration has reached an agreement with 1.7 million taxpayers of different guilds on raising their current year’s performance tax by 5% compared to that of last year. This comes as 95% of manufacturing sector will be subject to lower tax rates in a move to support domestic production,” he said.

According to the Central Bank of Iran's latest budgetary report, tax revenues stood at 1,158.4 trillion ($26.77 billion) in the last fiscal year (March 2017-18), registering a 14.2% increase YOY.

The government’s tax revenues consist of returns from direct and indirect taxation. Direct taxes include “tax on legal entities”, “income tax” and “wealth tax”.

Overall, direct tax revenues stood at 531.5 trillion rials ($12.28 billion), registering a rise of 7.6% YOY.

Indirect taxes, including “tax on imports” and “tax on goods and services”, hit 626.9 trillion rials ($14.48 billion), indicating a 20.4% rise YOY.

The report also shows tax on imports generated 226.7 trillion rials ($5.23 billion), 23.9% more than the year before while tax on goods and services earned the government 400.2 trillion rials ($9.24 billion), up 18.4% YOY. Value added tax, which is a subcategory of tax on goods and services, increased by 19.8% to reach 269.4 trillion rials ($6.22 billion).

"Tehran accounted for 58% of last year's tax revenues," director of Tax Administration of Tehran Province, Mohammad Reza Nouri, said.

Out of 4.5 million taxpaying entities in the country, about 1.2 million are based in Tehran.