Page 24 - IRANRptApr20

6.1.1​ Budget dynamics - tax issues, revenues
Iran recycling revenues from petrol price hike that sparked unrest to lower income groups
Officials targeting Iranian rial “billionaires” who’ve never filed a tax return
Iran has taken a step forward in recycling revenues gained from the sudden petrol price hike that in November caused nationwide unrest to lower-income groups in cash-subsidy payments.
The parliamentary commission responsible for the budget drawn up for the 2020/2021 Persian calendar year (starting March 21) has approved the combining of revenue accrued from a law that retargeted subsidies and the extra income earned from the petrol price rise. It further approved an increase in the monthly cash subsidy payment paid to lower-income deciles, according to IRNA.
The cash handouts were introduced by the Ahmadinejad administration. But the Rouhani administration has repeatedly cut the payments, meaning they have become gradually become worthless to growing sections of Iranian society, especially as the rial has been hugely weakened in the face of US sanctions introduced since mid-2018.
Hadi Qavami, a spokesman for the budgetary commission in parliament, said that some IRR310tn ($2.28bn at the government exchange rate) has been earned from the petrol price changes. He added that some 80% of that revenue would be channeled into the monthly subsidy plan for the lowest income deciles. In total, each Iranian meeting strict criteria would receive IRR720,000 ($5.30), Qavami said.
Under a new rationing system, each motorist that presents their ‘petrol card’ is allowed to buy 60 litres (13 gallons) of petrol a month at 15,000 rials (around $0.09 at the free market rate) a litre. Each additional litre then costs 30,000 rials. Previously, drivers were allowed up to 250 litres at 10,000 rials per litre. The announcement of the big price rise and rationing sparked unrest that grew to such extent that in response officials shut down the internet for several days in an attempt at curbing further trouble. Unverified reports have put the death toll from the protests in the hundreds or even at over 1,000.
The subsidy was introduced as a confidence-building measure by former president Mahmoud Ahmadinejad (in office 2005-2013) as a replacement for national subsidies on fuel and foodstuffs, which were costing his government of the time billions of dollars.
According to a ​law passed by Iran’s parliament in 2016​, ​the Rouhani administration set out to reduce and ultimately abandon monthly cash payments for many people with monthly incomes above $900.
Iran’s tax authorities have said that there are at least 300,000 Iranian rial (IRR) “billionaires” who have no tax file and have never filed a tax return. The director of the National Tax Administration (NTA), Omid Ali-Parsa, told Tehran’s Financial Tribune that the tax authorities have now brought these massive tax evaders into focus and are chasing down their assets and investigating their accounts in the pursuit of back taxes.
The previously ‘forgotten’ tax office was in 2015 given sweeping new powers to investigate the bank accounts of all perceived tax evaders as well as those of their kin. The move caused a certain amount of panic among Iranian business people at the time but officials are yet to make heavy use of the beefed-up powers.
24​ IRAN Country Report April 2020 www.intellinews.com