Government Retreats on Tax Floor for Workers and Employees; Salaries Up to 12 Million Tomans Exempt from Tax

The spokesperson for the Islamic Republic government announced President Ebrahim Raisi's directive to increase the threshold for the 'tax floor for workers and employees' following protests regarding the budget law provisions for 2024 in media and social networks. According to Iranian media, Ali Bahadori Jahromi, the government spokesperson, revealed in a press conference today, December 7, that there will be changes in the tax calculation basis for the income of government employees and workers in production and service units. The Secretary of the Islamic Republic's cabinet stated, 'According to the president's order, the tax floor for workers and employees will be increased to 12 million tomans per month.' One of the controversial aspects of the '2024 budget bill' prepared by Ebrahim Raisi's government is the 'unchanged' tax exemption ceiling compared to last year, despite an 18% increase in salaries. Based on Article 16 of the 2024 budget bill, the tax exemption ceiling and the tax rate on the total income of individuals under various titles such as salaries, allowances, bonuses, overtime, consultancy fees, session attendance fees, teaching bonuses, research fees, and incentives, both cash and non-cash, is set at 1.2 billion rials (equivalent to 10 million tomans per month). Following recent protests, it is now promised by the spokesperson and the head of the Islamic Republic government that the tax floor for employees and workers will be increased by '20%' so that if there is an 'increase in minimum earnings' at the beginning of Farvardin 1403 (March 2024), these wage earners will not be affected.