"Iranian billionaires either don't pay taxes or pay little"

The head of the Tax Affairs Organization says that according to surveys, half of people with incomes of billions of tomans do not pay taxes at all. The organization's inspection director estimates the annual amount of tax evasion to be up to 50 trillion tomans.

The debate over tax evasion and tax avoidance in Iran has a long history, but the figures vary. Now, the head of the Tax Affairs Organization says that half of Iranian billionaires do not pay taxes at all.

According to IRNA news agency, Omid Ali Parsa, on Saturday evening, November 24, at a meeting of the Khorasan Razavi Resistance Economy Command Headquarters in Mashhad, said that the taxes received are very low and are no more than about eight percent of total revenues because "there are many tax exemptions, more evasion, and lower tax bases."

The head of the Tax Affairs Organization said at the meeting: "The organization has been provided with a list of bank transactions of about 300,000 people with incomes exceeding billions. Based on the investigation, half of them were not taxpayers and the other half of those who were taxpayers paid less tax than required."

Tax evasion, tax exemption

Omid Ali Parsa did not provide further details about what the tax exemptions include and how much they amount to. This is a topic that has been widely discussed in recent years, but its exact dimensions are unclear.

In Iran, many sovereign institutions under the command of the Leader of the Islamic Republic are tax exempt or at least not subject to paying "direct taxes."

In November last year, the Deputy Director of Direct Taxes of the Tax Organization published a circular listing ten organizations, including the Martyrs' Foundation, the Relief Committee, and the Mostazafan Foundation, that are tax exempt. He also said that the economic activities of these organizations and foundations are not exempt from paying taxes.

Parsa stated at the Mashhad meeting that 141 trillion tomans in tax revenue is projected in this year's budget, saying: "The government does not want the disciplined, transparent, and well-accountable private sector to face double tax pressure to cover its expenses."

Hadi Khani, Director General of the Tax Affairs Organization's Inspection Office, announced in August this year that more than 24 trillion tomans in tax evasion had been identified by monitoring bank transactions in the last three years.

40 to 50 trillion Tomans of tax evasion

He also announced the identification of approximately 422 million bank transactions of "people suspected of tax evasion nationwide," and said that these cases are under investigation by tax units.

This official in charge of the Tax Affairs Organization said last month that, based on estimates, the amount of tax evasion in Iran is between 40 and 50 trillion tomans annually.

Apparently, these figures are related to known tax evasion. Hadi Khani told reporters on October 25: "I still don't have a number or figure for the provinces' tax evasion because estimating its amount requires access to detailed data on all economic activities."

Since a large part of economic activities in Iran are opaque and lack strict monitoring, it is neither easy to determine the true extent of tax evasion nor to effectively combat it.

For this reason, even senior government officials announce different figures on the matter. While Hadi Khani has announced the amount of annual tax evasion as high as 50 trillion tomans, Farhad Dejpasand, the Minister of Economy and Finance, estimates the amount to be between 25 and a maximum of 40 trillion tomans.

Some experts have estimated the amount of tax evasion to be as high as 80 trillion tomans per year. If this estimate is correct, it means that half of the Iranian economy is avoiding paying taxes.

Are salary earners real taxpayers?

It seems that the only sector that does not have much opportunity for tax evasion is the "salary and wage earners" group, which mainly includes government employees and their affiliated agencies.

In this year's budget, revenue from taxes and duties is projected at 238 trillion tomans, of which about 153 billion tomans are taxes and other duties. Of this amount, the share of the salary and wage group is 12 trillion tomans and the tax amount of the "occupational group" is 9 trillion tomans.

The group of occupations includes high-income earners such as doctors, lawyers, goldsmiths, restaurateurs, and wholesalers. The Fars News Agency reported in September this year, citing estimates from the Statistical Center of Iran, that this group's share of the total gross national product is 36 percent, but they only provide 6 percent of the government's tax revenues.

According to this report, if the tax rate for a group of occupations is calculated based on its share in the economy, the "actual amount of tax evasion" for this group reaches about 70 trillion tomans per year.

Source: DW