Payment Gateways Under Scrutiny

EghtesadOnline: Iran's e-payment network regulator, Shaparak, suspended operations of 400,000 online payment gateways and point-of-sale (POS) terminals in the past few weeks.

News ID: ۷۸۶۱۱۵

28 February 2021

The crackdown was in line with efforts to curb tax evasion and suspicious transactions through unidentified payment instruments, Kazem Dehghan, the Shaparak CEO, said. The nationwide electronic payment settlement network is affiliated to the Central Bank of Iran.

"The blocked devices were owned by people whose tax profiles were incomplete or who were deceased," he was quoted as saying by IBENA, the news agency affiliated to the Monetary and Banking Research Institute.

He said the POS owners had failed to provide the Iranian National Tax Administration proper information needed for determining tax eligibility.

The law to tax transactions via POS machines came into effect on Jan. 20. Businesses applying for POS or other payment gateways have to first file tax returns and those who already own POS terminals and payment gateways are automatically liable to pay tax.

According to Dehghan, Shaparak scrutinized the operations of more than two million payment instruments in coordination with Iranian National Tax Administration in the past month.

Cooperation between INTA and CBI is crucial because control over payment gateways is beyond INTA’s purview and is the responsibility of Shaparak.

The proposal to tax POS transactions became law two years ago but has gone through adjustments ostensibly due to technical issues. The law was passed to curb tax evasion and fraud particularly in the high income brackets like lawyers, physicians and realtors many of them infamous for evading tax.

Earlier Mehran Maharamian, the CBI vice governor for IT affairs, said the new rules would “significantly curb” illegal activities using rented payment gateways. "It will play a key role in controlling illegalities, mainly money laundering and online betting because owners of the gateways will be held accountable and must pay tax.”

With persistent reports of rising tax evasion and tax exemptions, the government is struggling to curb rampant tax dodging that costs the country billions of dollars every year.