In a critical situation where most of the Iranian regime’s officials and media outlets are warning its leaders to take control over the inflation and astronomical prices of most of the basic goods, which are adding to the people’s grievances, Raisi’s administration is compensating its budget deficit with VAT.
Something that has shown this critical situation is the increase in the price of macaroni. The state-run daily Entekhab wrote about this increase, which is the result of VAT, stating, “The maximum consumer price of simple noodles with a value of 500 grams was set at 17,000 tomans, 700 grams at 24,000 tomans, and 1,000 grams at 34,000 tomans. The previous price of 500 g, 700 g and 1000 g of pasta was 6300, 8600 and 12,500 tomans, respectively.”
This is just one example. It is not only pasta prices that have skyrocketed but also the prices of other food items and people’s needs following the increase in ‘VAT’. According to one of the regime’s economic experts, ‘increasing consumption tax’ is one of the main causes of inflation.
Of course, it is not only through VAT that commodity prices have risen exponentially, leaving the poor and oppressed living under pressure, but also through the increase in taxes in the 2022 budget, many people are being systematically extorted.
The state-run daily, Khabar Online said, “Employees pay 10 percent of the country’s tax and profitable state-owned companies nothing.”
While the vulnerable members of society are struggling with the regime’s latest decisions, wealthy institutions such as the Execution of Imam Khomeini’s Order (EIKO), the Mostazafan Foundation, the Housing Foundation, the Relief Committee, etc. do not pay any taxes formally, or they avoid them under various coverings such as tax evasion and arrears, each of which is denoted by astronomical figures.
The state-run daily Kayhan, the mouthpiece of the regime’s supreme leader Ali Khamenei, wrote about tax arrears in their publication, stating, “224 trillion tomans of tax arrears is close to the budget of one year of the country.”
This pressure on the people through direct and indirect taxes is in a situation where state-owned companies, and companies affiliated with the regime supreme leader Ali Khamenei’s office, are either exempt from paying taxes or avoiding paying them altogether.
The tax burden on the people is so great that fears of a social explosion have alarmed even the pro-government media. The state-run Iran daily wrote, “A 73 percent increase in taxes, in addition to putting pressure on poor people, will increase the recession, and livelihood pressures on people will increase this year.”
Even heads of the regime’s Basij are warning the regime and expressing their fears. In Raisi’s recent meeting with some of them in the local university, they accused the administration of having “sold the future government to the rich and super-rich” who do not pay taxes, and “delayed the reform of the tax system in favor of the super riches.”
Of course, they did not name these people as doing so would mean that they would have had to name Khamenei and the institutions affiliated with him.
Another one of the regime’s super-rich institutions is the Revolutionary Guards (IRGC), which controls a large part of the country’s economy. The Khatam al-Anbiya construction base, affiliated with the IRGC and which oversees the country’s largest projects, is one of the largest super-rich institutions in this system.