Why is the number of exemptions and tax evasions in Iran’s economy astronomical?
The indicators show that the amount of tax revenues of the government should be doubled at least. That is, from the current 153 thousand billion tomans to 306 thousand billion tomans. This distance to the optimal situation shows the amount of exemptions and tax evasions in the country’s economy, which is 153 thousand billion Tomans. Now a question arises. Why is the number of exemptions and tax evasions so high? The answer to this question can be expressed in the form of 4 reasons:
1- Relying on oil revenues: the existence of huge oil resources in the country has caused, in the last 4 decades, different governments to not have enough motivation to organize the tax system and collect taxes from high-income businesses. Because by selling crude oil and earning oil revenues, the government’s budget was easily provided, and by mistake, no need was seen to actualize other capacities.
2- Incorrect laws on exemptions: By studying articles 132 to 146 of the Direct Taxes Law, it can be seen that a huge part of Iran’s economy is exempted from taxes. Exemptions that are not consistent with any logic. For example, according to Article 139 of the Direct Taxes Law, religious and cultural activities are exempt from tax, which is far from logical. There are many such examples, as Omid Ali Parsa, head of the Tax Affairs Organization, said: “35 percent of the country’s economy, such as agriculture, culture, export, free and special zones, etc. It is exempt from tax, and it is a general exemption that is not clear what it is.”
3- The traditional mechanism of tax collection: Currently, tax collection from businesses and companies is done in an unsystematic and audit-oriented manner. In this process, which is done based on self-declaration of taxpayers; There is a possibility of understatement and confusion with the auditors; As a result, the actual amount of tax is not collected. In fact, in the current system, the auditors, by receiving an amount from the taxpayers, waive their taxes and collect a much lower figure from them.
4- Lack of public culture of taxation: Unfortunately, there has been no public culture in the field of taxation in the country, which has caused unfair redistribution of wealth in the country. For example, the actions and follow-ups of the Tax Administration to collect taxes from doctors have not yet been successful, and instead of taking the initiative, doctors state why other classes do not pay taxes. In general, the Tax Affairs Organization goes to any trade and encounters such arguments, which indicate a cultural weakness in this field.
In general, it seems that the most serious option to get rid of the oil budget is to prevent the tax evasion of the high-income groups and to amend the laws related to tax exemptions./with economics professors