The National Iranian Tax Administration earned 1,980 trillion rials ($6.6 billion) from taxation during the current fiscal year’s first eight months (March 21-Nov. 21), says the head of the organization, Davoud Manzour.
The revenues show a 50% rise compared with last year’s similar period during which INTA earned 1,314 trillion rials ($4.38 billion at the current exchange rate).
Although the rise may appear considerable, the economy is experiencing hyper-inflation rates of above 40%, ILNA reported.
In fact, taxation of economic enterprises declined significantly in the fiscal 2020-21 due to the imposition of Covid-19 restrictions and repeated shutdowns.
Ahmad Ghaffarzadeh, an advisor to Majlis Research Center – the research arm of Iranian Parliament, says, “Optimistic estimates put the volume of tax evasion in Iran at 1,000 trillion rials [$3.3 billion] per annum,” implying that the volume may be much higher.
He added that the tax-to-GDP ratio in Iran currently stands at around 7%. This is while neighboring economies register up to 12-17% and the tax-to-GDP ratio increases to 30-35% in developing countries, suggesting that Iran’s economy needs to achieve a 50% surge in this ratio to reach the average rate achieved by neighboring countries. Such an increase will materialize by setting new tax bases.
Therefore, the only way to achieve this goal under the current sanctions regime is by reducing tax exemptions of special institutions, whose former directors now hold posts in the new government, and of course preventing tax evasion, according to the Persian daily Etemad.