Iran Economy NewsIran’s Taxing System, Extortion of the Underprivileged

Iran’s Taxing System, Extortion of the Underprivileged

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In Iran gold and the supreme leader Ali Khamenei’s financial foundations are not subject to tax, but the poor society especially the working class must tolerate the burden of much of the government’s spending by paying taxes.

Rich institutions like the Execution of Imam Khomeini’s Order (EIKO), the Mostazafan Foundation, the Foundation of Martyrs and Veterans Affairs, etc., and other entities, such as the financial empires of the Revolutionary Guards (IRGC), are exempt from paying taxes.

Furthermore, the gold tax has shrunk to zero. It is in large part in the hands of government officials and institutions.

On July 7, 2021, the newspaper Industry, Mine and Trade wrote, “With the current inverted tax system, the main burden of taxation has fallen on wage earners.”

And the state-run daily Vatan-e-Emrooz confirming this process on August 22, 2021, wrote: “Due to poor regulatory structure and lack of transparent information systems, the lower classes of society have always been at the forefront of paying taxes, and the main beneficiaries of the economy most of whom are active in the unrealistic and speculative sector are exempt from paying taxes.”

‘The main beneficiaries are the institutions mentioned above. Government economic experts estimate that institutions affiliated with Khamenei hold 80 percent of the country’s economy and resources, while 96 percent of people live below the poverty line.

And their share of the country’s incomes and wealth is so low that it is not counted, as we see during the Coronavirus crisis that the country’s health and treatment system is so backward that they cannot afford to treat the patients.

The state-run daily Hamdeli on August 15, 2021, wrote: “Now that COVID-19 is killing many Iranians, the authorities should be asked what you did with people’s money. Tax money and oil sales in all previous years, if it was not supposed to help the Iranian people in a critical situation like a disease, then what was its purpose? Where has the money been spent? What have the people achieved?

“If the authorities say there is money, but it is not possible to provide vaccines, medicines, and other items for any reason, why should people give their money to those who don’t know how to break down barriers and provide them with the right services at the lowest cost?

“If people are going to treat themselves at home in the face of illness, why should they pay for health care services under the name of premiums? These people who now do all the health work by themselves have no right to ask the authorities what you did with the tax and oil money that was sold in all the past years?”

In the meantime, the government’s budget deficit is an unbelievable amount of 400 to 450 trillion tomans. According to a lawmaker, most of the budget deficit is related to the lack of tax collection from the government institutions as a pending tax, which amounts to ‘270 trillion tomans.’

In July 2021, media outlets affiliated with both regime factions wrote, as the head of the Tax Administration said, tax evasion in the country reached 100 trillion tomans.

Regarding the tax evasion, the regime’s TV moderator said to Mohammad Reza Pour Ebrahimi, chairman of the Economic Commission of the parliament:

“The share of taxes in GDP is almost an average of around 20 percent all over the world, we approved in the Sixth Plan law around 10 percent. The number that was approved in 2020 is 5.5 percent, the simple concept is that as much as we are taxing, almost we are witnessing the amount of tax evasion.” (State-TV Channel Five, August 5, 2021)

Jabar Koochaki Nejad, an MP from Rasht city, pointing 120 trillion tomans of the government’s budget, about the tax exemptions and evasion said:

“Unfortunately, tax evasion in our country is more than 70 trillion tomans. Of course, this is other than tax exemptions, and the number of tax exemptions is very high.” (State-run website Bazar News, August 8, 2021)

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