By Mahnaz Abdi

Sanctions, an opportunity to benefit from tax potential

July 8, 2019

Donald Trump withdrew the U.S. unilaterally from the 2015 nuclear deal between Iran and the world’s major powers (known as Joint Comprehensive Plan of Action or JCPOA) in last May and re-imposed sanctions against the Islamic Republic.

The first round of sanctions went into force on August 6 and the second round, which targets Iran’s oil exports and banks, were snapped back on November 4.

The U.S. administration has threatened to sanction any country that do business with Iran and Trump has also vowed to drive Iran's oil exports down to zero.

To minimize the effects of sanctions on the country’s economy, Iran is adopting some new economic approaches and the main important one is to reduce reliance on the oil revenues.

To materialize this objective, the country has put strengthening domestic production, boosting non-oil exports specially to the neighbor countries, and collecting taxes more systematically on top of its economic policies.

Earlier this month, Iranian Minister of Finance and Economic Affairs Farhad Dejpasand said that reducing the current year’s budget dependency on oil exports is the most important economic objective in the country; and his ministry is seriously following up defined tax policies to this end.

The proposed 17.03 quadrillion rials ($405 billion) budget bill for this Iranian year (started on March 21) has envisaged 1.53 quadrillion rials (about $36.5 billion) of tax income.

Dejpasand has also stressed that an efficient tax system should be a priority in the government’s policy making.

A non-oil budget requires other stable income sources.

In a message on the occasion of the National Day of Tax (July 7), finance minister stressed the necessity of planning for using stable non-oil income.

He wrote the sanctions should be considered an opportunity to reform the budget structure and to take the advantage of tax potential.

Also, in a separate message on the same occasion, Omid-Ali Parsa, the head of Iran’s National Tax Administration (INTA), wrote; “Establishment of an efficient tax system and reducing the budget reliance on oil income requires renewing the country’s tax system in all aspects.”

The official further underlined that lunching smart tax collection projects based on the comprehensive tax plan is a promising measure that INTA is taking to fulfill the pivot role of tax in the national economy during this year.

All such measures, while promoting the role of tax as an instrument for stability, transparency and economic justice, will lead to reduce the effects and pressures of sanctions on the country, the official underlined.

Leave a Comment

4 + 0 =