Gas stations obliged to pay VAT

July 19, 2020 - 15:15

TEHRAN – Iranian National Tax Administration (INTA), in its latest revision of the country’s tax regulations, has obliged fuel station owners to conform to the Value-Added Tax (VAT) regulations, IRNA reported on Sunday.

According to Mohammad Masihi, INTA’s deputy for tax incomes, all fuel stations (both oil and gas products) with any volume of sales or income from products and services are called on to abide by the VAT regulations as of the beginning of the current Iranian calendar year 1399 (March 20).

A value-added tax, known in some countries as a goods and services tax (GST), is a type of tax that is assessed incrementally. It is levied on the price of a product or service at each stage of production, distribution, or sale to the end consumer. If the ultimate consumer is a business that collects and pays to the government VAT on its products or services, it can reclaim the tax paid. It is similar to and is often compared to a sales tax.

Iran’s tax revenue has increased 31 percent in the past Iranian calendar year (ended on March 19), according to Omid- Ali Parsa, the INTA head.

Putting the country’s tax income at 1.43 quadrillion rials (about $34.04 billion) in the previous year, the official said, “We could collect 250 trillion rials (about $5.9 billion) as value-added tax”, IRIB reported.

Parsa also said that the country has gained projected tax income by 102 percent in the past year, and put the average tax income growth at 21 percent during the previous five years.

The head of the National Tax Administration further mentioned preventing tax evasion as one of the prioritized programs of INTA.

As the oil sale accounts for just seven percent of the country’s income in the current Iranian calendar year (began on March 20), the revenues gained from elimination of hidden energy subsidies as well as increased tax incomes will replace oil revenues, according to Head of Iran's Plan and Budget Organization (PBO) Mohammad Bagher Nobakht.

“This does not mean a rise in tax income; but by setting new tax bases and eliminating unnecessary exemptions at a time of economic warfare, more tax revenues will be provided,” the official had said in late November 2019.

EF/MA

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