Value added tax in Iran makes almost half of the Government’s income, says Iran Tax Organization.
“Since March 2016, 1700 trillion IRR or 52.5 billion dollars have been collected as VAT”, said Kamel Taghavinejad, Chairman of the Iran Tax Organization.
The VAT law in Iran, has been implemented from 2008 in experimental capacity and this week, the Parliament amended and renewed it for another Iranian fiscal year, starting on March 21, 2017.
Taghavinejad provided a report on the performance of the Tax Organization at the Parliament: “More than 600 trillion IRR ($18.5b) has been given to municipalities and the Tehran municipality has received more than 40 trillion IRR ($1.2b). From the collected VAT, 1% has been assigned for the Health Reform Plan to be paid to Health Ministry of Iran.”
Based on estimates by the Tax Organization, nearly 5 million unions are under the jurisdiction of the VAT law. In cases where job groups cannot provide the required documentation, the Tax Organization applies a multiplier based on their performance to collect tax.
Since exportation is exempt from tax, the Tax Organization must return the VAT paid by exporters in a maximum of one month.
Taghavinejad emphasized: “80% of VAT is collected from imports at point of entry and we don’t collect from retailers. Abandoning this project will deny the country from 400 trillion IRR in income which would spell the abandonment of many civil projects.”
