Gov’t Rolls Out Financial Support as Lockdown Starts

EghtesadOnline: A number of financial support plans, including tax relief measures, have been introduced to alleviate the impacts of the new round of coronavirus lockdown for businesses.

News ID: ۷۸۵۶۷۸

22 November 2020

“The procedure for the payment of direct tax will be suspended until Feb. 18, 2021, and those applying for business licenses or their renewals won’t be required to submit their tax return documents,” Vice President for Economic Affairs Mohammad Nahavandian said on Saturday.

“Third, the due dates for the submission of value added tax declarations concerning the third and fourth quarters of the current Iranian year [started March 20] have been extended for one month,” he was quoted as saying by IRIB News.

Economic entities in Iran are required to submit their VAT declaration or return (a document in which a taxpayer summarizes transactions for a given period to inform the tax administration of how much VAT he has to pay or how much VAT he should be reimbursed for that period) every quarter.

“Those who pay their back taxes completely by March 2021 will be eligible for the Iranian National Tax Administration penalty relief. The deadline for appealing against the imposed tax will be extended for 1.5 months. The deadline for submission of real entities’ financial statements [formal records of their financial activities] will be extended until Feb. 18, 2021,” he said.

“All permits and licenses issued by all state agencies, which expire by Jan. 20, 2021, will be automatically extended until Feb. 18, 2021. The deadline for paying municipalities duties has also been extended until Jan. 20, 2021,” he said.

Nahavandian said nearly one-third of Iranians (nearly 30 million people), those who don’t have a permanent job, will receive financial assistance to the tune of 1 million rials ($38) for four months to help cover urgent needs during the coronavirus lockdown and, 10 million households will receive a loan worth 10 million rials with a repayment period of 30 months.

Referring to 14 hard-hit groups of businesses that were found eligible to receive government-backed loans earlier this year, the official said, “If these businesses default on loan installment of the month ending Dec. 20, the payment will not be considered past due; they, in fact, get a one-month breather from the government. Also, in case of a default in the payment of the debt related to the month ending Dec. 20, banks will clear up the financial consequences of these businesses’ bounced checks. Deadline to pay gas bills of these economic entities, which falls between Nov. 21 and Jan. 19, 2021, will be extended for two months.”

Following the outbreak of coronavirus, the Iranian government approved a 750 trillion-rial ($2.9 billion) bailout plan for low-income households and struggling businesses in March. The loans included 10 million rials worth of interest-free loans for each eligible households and a total of 490 trillion rials worth of loans at an interest rate of 12% with a repayment period of two years for economic enterprises.

According to Governor of the Central Bank of Iran Abdolnasser Hemmati, the new round of loans will be financed by the remaining resources of the 750 trillion-rial bailout plan.

Last week, the Iranian government ordered hundreds of cities across the country to abide by a variety of stringent new restrictions starting from Nov. 21, following a new surge in coronavirus cases.

A total of 150 cities and towns have been categorized as “red regions”, including the capital Tehran, where most workplaces and businesses will close for two weeks and only a third of the workforce will be permitted to show up at entities deemed to be providing essential services. Commuting into and out of these cities is forbidden from 9 p.m. in the evening to 4 a.m.

“Only businesses categorized as Group I, including bakeries, supermarkets, grocery stores, car repair shops, chain stores, health and treatment centers, pharmacies and print shops, are allowed to operate during the two-week period,” Qasem Noudeh-Farahani, the head of Tehran Guilds’ Chamber, said.

“Group I businesses, which account for 30% of all businesses, also have to close shops at 8 p.m.,” he was quoted as saying by Fars News Agency.

Government Spokesman Ali Rabiei said last week that the National Coronavirus Taskforce’s plan to close cities in red zone can be extended beyond two weeks.

“It’s a flexible scheme and will not necessarily end after two weeks. If a region’s transmission rate does not drop after two weeks, the plan can be extended,” he said.