Iran Times

‘Public must learn to like taxes’

November 10, 2017

LAYLAZ. . . oil can’t do it
LAYLAZ. . . oil can’t do it

Economist Seed Laylaz says the Iranian public must give up the idea that they can continue paying for public services with oil revenue and understand they must begin paying taxes to get the government they want.

He said tax revenues would become a dependable source of income for the country, if they increase to 12 percent of the gross domestic product.

“The incumbent government or future governments need to earn their revenues through taxation and that’s possible by eliminating tax exemptions and employing tax technology,” Saeed Laylaz, a professor at Shahid Beheshti University, said in an interview with Khabaronline.

The authorities need to reach a consensus that petrodollars are not sufficient to run the country, no matter what government is in power.

“Oil exports are unlikely to generate additional revenues in the next 10 years, regardless of the extent of price volatility in the market. The necessary expenditures will exhaust the sum realized from oil sales,” he said.

The economist said, “A nation that doesn’t pay taxes can’t demand accountability from the government or expect democracy to reign in the country. With oil revenues at their disposal, governments tend to become unanswerable to people. Democracy is closely intertwined with an equitable taxation regime.”

According to the chairman of the Iranian National Tax Administration (INTA), Kamel Taqavinejad, 20 percent of Iran’s taxpayers pay 80 percent of all tax revenues while about 65 percent of all taxpayers are either exempt or pay less than 10 million rials ($250) in taxes annually.

Laylaz said Iran’s economy is getting bigger by the day, and so is the population and the demands of the government and people.

By the same token, the ratio of oil exports to population has declined over the past four decades. Per capita crude oil revenues today have dropped to just one-sixth of what they were in 1976-77.

INTA’s figures show tax evasion amounts to between 140 trillion and 300 trillion rials ($3.5 billion-7.5 billion) in the country due to the gray economy, smuggling and lack of transparency.

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