At the beginning of this Persian calendar on March 21, the regime ruling Iran increased tax revenues by 47 percent to compensate for it budget deficit. This measure has put significant pressure on the country’s population.

Due to the inflation witnessed in the past year or two, “the poverty line in [the Iranian capital] Tehran has reached 300 million rials (approximately $600),” according to Mohammad Bagheri Banayee, a member of the regime’s Majlis (parliament). All the while, the mullahs’ regime has been placing even more pressure on the low-income classes.

It is worth noting that the minimum monthly salary of wage earners in Iran is approximately 80 million rials, meaning a mere $155.

The total budget of the regime in the year 1402 (from March 21, 2023, to March 21, 2024) is set at $105.22 billion. The allocated general budget is $43.28 billion, and the budget for government-linked companies is $61.94 billion. The estimated tax revenue in the budget is $16.76 billion, accounting for approximately 40 percent of the general budget.

“Government-affiliated companies, despite having financial transactions in the billions of rials, enjoy tax exemptions,” according to a report by the regime’s Rokna news agency published on April 5.

As mentioned above, the budget of state-owned companies is approximately 1.5 times the general government budget.

“In the first nine months of the year 1401 (from March 21, 2022, to March 21, 2023), the Ministry of Economic Affairs announced that it had collected $6.974 billion in tax revenue, surpassing the projected tax revenue for that period,” according to a January 1 report by the regime’s Shargh website.

“One of the groups that are supposed to pay taxes according to Iran’s tax law are high-income earners who receive more than 70 million rials (approximately $140) as salary,” according to the regime’s Rokna news agency published on April 5.

However, with Iran’s inflation at record-high levels unseen in the past 80 years, even people living below the poverty line, sometimes earning half as much, are required to pay taxes.

Religious and pilgrimage sites in Iranare exempt from taxes. Under this pretext, the Astan Quds Razavi, which is a financial empire linked to the regime’s highest echelons, does not pay any taxes. Many institutions and economic holdouts affiliated with the regime’s Islamic Revolutionary Guard Corps (IRGC) and Basij force, the Shahid Foundation, and the Executive Headquarters of Imam Khomeini’s Orders, also do not pay taxes.

In addition to tax exemptions, another method of tax evasion used bylarge companies in the Iraniain regime is the use of interest-free funds.

“One of the tax evasion methods used by violators and profiteers is concealing their activities by taking advantage of the opaque nature of interest-free funds,” according to a 6 September 2022 report published by the government-linked Farheekhtegan newspaper.

This is just a summary of government tax evasion in Iran. However, the important point is that smuggling encompasses a significant portion of the regime’s economy, and obviously, no one can collect taxes from smuggling.

Different figures are cited within regime sources regarding the amount of goods smugged in Iran. Some members of the regime’s Majlis (parliament) and private sector activists believe that the country’s smuggling volume was over $25 billion in the year 1400 (March21, 2021 to March21, 2022), based on statistics from international customs. However, some believe the actual volume being up to $30 billion. Javad Hosseini-Kia, a member of the Majlis Industries and Mines Commission, believes the country’s annual smuggling volume is worth $26 billion.

“Ninety five percent of the annual $25 billion in smuggling comes from official sources, and its individuals and elements are well-known,” said Tehran Mayor Alireza Zakani in the last election debate.

“One example of smuggling is in the clothing sector, which Iran’s Ministry of Industry and Mines experts believe has a smuggling volume of $9 billion, but the Anti-Smuggling Headquarters reported it at $800 million,” according to a January 8 report by the state-run Radar Eghtesad website.

Amir Mohammad Parhamfar, the Deputy Chair of Preventive Measures at the Anti-Smuggling Headquarters, said to the semiofficial ILNA news agency on May 10 that currently the country’s entire market of cosmetic products is involved in smuggling.

If we consider $25 billion as a basis, the value of goods smuggled would be 12.5 quadrillion rials, which is close to 60 percent of the country’s general budget for the current year. This leads to the destruction of domestic production and skyrocketing unemployment.

However, who are the regime-linked smugglers who smuggle goods through official channels?

According to regime statistics, the IRGC control over 113 docks and 25 airports that engage in smuggling goods. They have destroyed the country’s economy and do not pay a single rial in taxes, customs duties, or fees.

The regime collects taxes from the meager salaries of Iran’s workers and employees. However the IRGC, as the main smugglers who smuggle billions of dollars’ worth of goods annually, do not pay any taxes at all. The regime’s Majlis has even increased the IRGC’s budget by 50 percent.

People pay taxes so that the government can provide services to them. However, in the macroeconomic indicators, Iran now has a very weak and low-level economy in comparison to other countries. In addition to taxes, it also plunders the country’s oil revenues and other resources. However, the people’s share of these revenues is more poverty and misery.

Norway is an example of a country with abundant oil resources that manages the population through taxation. Norway is known for its advanced economy and high welfare for its people. The country’s oil revenues are stored in the country’s sovereign wealth fund for future generations, now ranked as worlds’ second-largest sovereign wealth fund, with approximately $1.13 trillion in assets.The state-run Entekhab website in Iran published a startling report on May 11. Mehdi Ghazanfari, CEO of Iran’s National Development Fund, said at the National Conference on Smart Economy and Financial Development: “Our fund stands at $150 billion fund, of which $100 billion has been withdrawn by the government, and about $40 billion has been paid in commission fees.”

Source » iranfocus