"Iranian doctors evade taxes worth six trillion tomans"

Following the refusal of some Iranian doctors and dentists to pay billions of tomans in taxes, the Tax Affairs Organization and the Parliament have prepared plans to prevent tax evasion, although they say that pressure to repeal the resolutions has increased.

Iranian doctors and dentists paid about 150 billion tomans in taxes in 2017. This is despite the Tax Affairs Organization announcing that the actual tax amount for this profession is 700 billion tomans, and the organization is facing many problems in collecting this amount, which is significantly different from the amount paid.

The dispute between the taxpayer and these taxpayers is over the amount of at least 60 trillion rials, or 6 trillion tomans, which the Majlis Research Center said should be collected from doctors and dentists, but "tax evasion" is preventing this from happening.

How much tax evasion?

Tax evasion by various professions, including doctors, is characterized by numbers and figures. The report published by the Parliamentary Research Center on the 2019 budget bill included these numbers, and some members of parliament and officials from the Tax Affairs Organization followed up on the issue. These follow-ups have shown that some doctors are not “transparent” about declaring their income and, with “special tricks,” not only keep their income secret but also evade paying actual taxes.

The 2019 Budget Consolidation Commission in the Islamic Consultative Assembly said that if at least 6,500 to 6,700 billion tomans are collected from doctors, the country's budget for 2019 could be strengthened.

Information on individuals who evade taxes has been obtained from the comprehensive tax plan systems and given to special medical examination departments to be audited specifically and with priority. "These individuals are also subject to fines according to the law for failure to submit tax returns."

The tax on doctors is estimated to be around 700 billion tomans per year, of which doctors have only deposited 150 billion tomans, which means paying the tax in full. This trend and the amount of tax have supporters and opponents in the parliament, the Tax Affairs Organization, and the Medical System Organization.

Opponents say that many government and even private sector employees, who are usually the "weaker class," pay their taxes, including payroll taxes, in full, but how is it possible that doctors are not subject to the real tax burden?

Recently, the head of tax affairs for the city and province of Tehran said that out of about 20,000 doctors in Tehran, only 11,000 completed tax returns for the 2017 fiscal year, with the average tax declared by each person being 5.7 million tomans. Doctors had also declared their income for the 2016 fiscal year at a similar figure to the 2017 fiscal year.

However, investigations by tax officials in Tehran city and province showed that, based on statistics and information from the comprehensive tax plan systems, the average income for each physician in 2016-17 was about 14 million tomans, not 5.7 million tomans.

 The case of 500 high-income doctors

Among the working doctors, 500 doctors are said to have higher incomes than the rest because they have been charged with tax evasion. The average monthly tax declared by these doctors was about 17 million tomans, while Mohammad Reza Nouri, head of tax affairs for the city and province of Tehran, said that their actual tax was determined to be more than 76 million tomans, which must be paid.

According to tax officials, the weakness of legal mechanisms and the lack of connection between databases have made it difficult to collect actual taxes not only from doctors but also from other professions, to the point where they consider collecting actual taxes "impossible."

Deposit into the secretary's account!

Add the failure to install a card reader and the deposit of doctor's visit fees into the secretary's account to the problems and weaknesses of the aforementioned mechanisms. This issue is not new, but to the surprise of some in the parliament, it has also become a media outlet that "some doctors deposit their income into their secretary's account."

"Ways to hide income" are among the references made by some representatives of the Parliament's Budget Consolidation Commission to the "increasing" trend of this happening among some doctors, in a way that these individuals transfer their income and deposits to the secretary's account and try to "make sure there is no trace of these incomes."

According to official statistics, 40 percent of the Iranian economy pays taxes, 40 percent is exempt from paying taxes, and 20 percent “slacks off” the tax burden and does not pay taxes. The other 60 percent either has not yet fallen into the “tax trap” or has been exempted for various reasons.

Suspicious transactions are tracked.

Installing a card reader in the office is considered one of the doubts of doctors to avoid getting caught in these tax traps and they are always against it. This issue led to a campaign launched a long time ago against doctors who do not have card readers and force patients to pay in cash. In this campaign, everyone was asked to publish the names of doctors on social networks who do not have card readers in their offices.

The lack of card readers in doctors' offices is one of the problems that, according to tax officials, has also led to tax evasion, to the point that Gholamhossein Davani, a member of the Iranian Association of Certified Accountants, claimed that "many doctors have taken their card readers in the names of their secretaries."

This new method may be a temporary way to evade taxes, but "suspicious transactions in secretarial accounts" is an issue that the Tax Affairs Organization has announced it is pursuing.

Meanwhile, a representative of the Tax Dispute Resolution Council of the Tehran Tax Affairs Organization has considered the lack of use of card readers to be in the interest of doctors and to the detriment of the public and patients. According to those in favor of paying doctors' taxes, installing card readers in offices should become a legal requirement.

"Pressure" to cancel the decisions of the consolidation commission

The installation and use of card readers is being emphasized by the Tax Affairs Organization, while there have been reports of "pressure" to cancel new resolutions of the Parliament's Consolidation Commission.

The two most recent resolutions of the Iranian Parliament's Consolidation Commission are regarding the requirement for doctors to install card readers and the deduction of 10 percent of their fees by medical centers as a tax.

Opponents of these two resolutions, whose words some representatives have considered "pressure," insist on the "fair" conditions for paying taxes.

Hospitals are now required to send the income earned by doctors in hospitals to the Tax Affairs Organization every three months in a mechanized manner.

Failure to use the card reader will also be investigated in a special way. This process is set to be even stricter, and starting next year, which is about two months away, stricter measures will be taken regarding the acceptance of expenses and determining the taxable income of doctors.

Source: DW