Reactions on social media to the approval of the general outlines of the capital gains tax plan: Why are you only using Europe as a model for taxation?

The general outline of the "Capital Income Tax" plan, which, if finally approved, would require anyone who buys foreign currency, gold, housing, or a car and then sells it to pay a significant portion of the profit as tax, has been met with mostly negative reactions on social media.

On June 25, Iranian parliamentarians approved the outline of the "Capital Gains Tax" plan, and according to ISNA, according to this plan, the excess value of an asset over its acquisition value at the time of transfer is considered capital gains and its sale is subject to tax. Accordingly, real estate held for less than a year is subject to a 40 percent capital gains tax, and after that, three percentage points are deducted from the capital gains tax rate annually, and from the twelfth year onwards, they are subject to tax at a fixed rate of four percent.

Also, owners of wasteland will pay a capital gains tax of 40 percent.

According to this plan, keeping all types of cars for less than a year will be taxed at a rate of 30 percent, and if kept for more than a year, the annual rate will be reduced by 10 percentage points, and the relevant tax will be calculated at a fixed rate of zero percent from the fourth year onwards.

Also, holders of gold, jewelry, and currency held for less than a year will pay a tax of 30%, up to two years, 20%, and more than two years, 10% tax.

Real estate with various uses and rights to transfer the premises, various types of land motor vehicles, jewelry including gold, gold bars, molten gold, gold and platinum jewelry, and various types of foreign currency are the assets considered in this plan.

Last August, the Voice of America reported, citing the head of the Tehran Chamber of Commerce, Industries and Mines, that $98.4 billion in foreign exchange had left Iran over a period of nine years, and wrote that during this period, an average of $11 billion in capital had left the Iranian economy annually.

• Explanations from parliament and government officials

The spokesman for the Economic Commission of the Islamic Consultative Assembly stated that “the capital gains tax law is not intended to generate revenue for the government,” adding, “Private sector investment has decreased to minus six percent.” He emphasized, “With this law, capital is supposed to enter the field of production and employment instead of leaving the production path.”

The deputy legal officer of the Tax Affairs Organization also considered the plan to be part of a bill that was submitted to the parliament two years ago. According to Mahmoud Alizadeh, “taxes are a tool to prevent speculation and achieve real supply and demand,” and if someone is not a real consumer, they must pay the highest taxes to enter the housing, gold, currency, and car markets.

• Capital taxes in an inflationary economy

Abbas Abdi, a journalist and analyst, gave an example: “The parliament’s income tax plan is like having a liter of milk, the government pours a liter of water into it and allows you to sell it at the previous price and make a 100 percent profit, then takes the profit.” He emphasized: “Of course, you are also a loser; because they do this to everyone and everyone’s costs double. So you have not made a profit either.”

Rashad Kamangar considers capital gains taxes in an inflationary economy to be "plunder and the spread of poverty."

An Iranian Twitter user also wrote: "For collecting taxes, the model is Western countries, and examples are from America, France, and Sweden. For providing services, the model is African countries. You have thousands of plans to steal from people's pockets!"

Referring to the approval of the general outlines of the capital gains tax plan, the blue-eyed user wrote: "A new tax (forcible transfer) is on the way."

Referring to the capital gains tax law, Shirin was reminded of the Robin Hood cartoon and mentioned the poor boy's last coin that the sheriff cunningly stole from him.

Source: Voice of America