Social Media Reactions to Capital Gains Tax Bill Approval: Why Are You Only Following Europe’s Example in Taxation?

The framework of the “capital gains tax” bill, which if finally approved would require individuals who buy and then sell currency, gold, property, or vehicles to pay a substantial portion of the resulting profit as tax, has faced mostly negative reactions on social media.

Iranian parliament representatives approved the framework of the “capital gains tax” bill on June 5, and according to ISNA, under this plan, the increase in asset value at the time of transfer compared to its acquisition value is considered capital gains and is subject to taxation upon sale. Accordingly, properties held for less than one year are subject to 40 percent capital gains tax, after which the tax rate decreases by three percentage points annually, and from the twelfth year onwards, they are taxed at a fixed rate of four percent.

Property owners of barren land also pay capital gains tax equivalent to 40 percent.

According to this plan, holding various automobiles for less than one year is subject to 30 percent tax, and if held for more than one year, the rate decreases by 10 percentage points annually, with the relevant tax calculated at zero percent from the fourth year onwards.

Additionally, holders of gold, jewelry, and currency held for less than one year pay 30 percent, up to two years 20 percent, and more than two years 10 percent in taxes.

Properties of all types and usage rights, all types of land motor vehicles, jewelry including gold, gold bullion, gold coins, gold ornaments and platinum items, and all types of foreign currency are the assets covered by this plan.

Voice of America reported last August, citing the head of Tehran’s Chamber of Commerce, Industry and Mines, that 98.4 billion dollars in currency flowed out of Iran over 9 years, and noted that during this period, an average of 11 billion dollars in capital left Iran’s economy annually.

• Statements from Parliament and Government Officials

The spokesperson for the Economic Commission of the Islamic Consultative Assembly, stating that “the capital gains tax law is not intended for government revenue generation,” said: “Private sector investment has declined to negative six percent.” He emphasized: “With this law, capital is meant to enter the field of production and employment rather than leaving the production path.”

The legal deputy of the Tax Administration Organization also described this plan as part of a bill presented to parliament two years ago. According to Mahmoud Alizadeh, “taxation is a tool to prevent speculation and reach real supply and demand,” and if someone is not an actual consumer, they should pay the highest tax to enter the housing, gold, currency, and vehicle markets.

• Capital Gains Tax in an Inflationary Economy

Abbas Abdi, a journalist and analyst, gave an example: “Parliament’s capital gains tax plan is like having one liter of milk, the government pours one liter of water into it and lets you sell it at the previous price and make 100 percent profit, then it takes the profit.” He emphasized: “Of course you are also a loser; because this is done to everyone and everyone’s costs double. So you didn’t make a profit either.”

Rashad Kamanger considers capital gains tax in an inflationary economy to be “exploitation and the spread of poverty.”

An Iranian Twitter user also wrote: “To collect taxes, you follow Western countries as a model and take examples from America, France, and Sweden. To provide services, you follow African countries as a model. To steal from people’s pockets, you have thousands of plans!”

A user named Blue-eyed Eyes, referring to the approval of the capital gains tax bill framework, wrote: “A new tax (forced money) is on the way.”

Shirin, referring to the capital gains tax law, recalled the Robin Hood cartoon and mentioned the last coin of a poor boy that the sheriff stole from him through deception.

Source: Voice of America