Hassan Rouhani's Deputy: 60% of Iran's Economy Does Not Pay Taxes

Elham Aminzadeh, Iran's Vice President, stated on Thursday in Mashhad that there is a 60% tax evasion rate in Iran, saying, "Only 32% of those who are supposed to pay taxes actually bear the tax burden." According to IRNA, the legal deputy of Hassan Rouhani, speaking during a meeting with the governor of Razavi Khorasan, continued: "In Iran, only registered producers and government employees pay taxes." Aminzadeh noted that the financial turnover of "smugglers and underground economy operators" in Iran reaches five billion dollars annually, with no taxes paid. Ali Asgari, the former head of the Tax Affairs Organization, had previously stated in December 2015 that 60% of Iran's economy does not pay taxes. Aminzadeh also mentioned that "40% of the entire economy is exempt from taxes, and 20% of the economy is related to underground activities that do not pay taxes." Major tax-exempt sectors in Iran's economy include religious institutions, economic entities affiliated with military, police, and security forces, and organizations under the Supreme Leader of Iran. Mohammad Baqer Nobakht, head of Iran's Management and Planning Organization, stated earlier this week that the government will start collecting taxes from "sacred thresholds" and "headquarters" next year. According to ILNA, the Vice President announced that the legal basis for taxing these entities comes from a parliamentary resolution, stating: "Fortunately, the law today has allowed us to do this, and we will implement it next year." The spokesperson for the eleventh government also announced plans to identify tax-evading enterprises. Last year, the Iranian parliament mandated that organizations under the Supreme Leader and armed forces pay direct taxes, but to satisfy the Guardian Council, the collection of taxes from entities like "Astan Quds Razavi" and economic enterprises under the armed forces and the Executive Headquarters of Imam's Command and the Foundation of the Oppressed was made conditional upon the permission of the Supreme Jurisprudent. Ayatollah Ali Khamenei, the Supreme Leader of Iran, issued the "General Policies of Resistance Economy" two years ago and has repeatedly emphasized the foundations and realization of this economic model over the past two years. "Resistance Economy" is a term used by Khamenei and his associates to describe an economy that is independent of foreign countries. In sections of the announcement of the general policies of the Resistance Economy, emphasis is placed on "cutting the budget's dependence on oil," "countering vulnerability from oil and gas export revenues," "transparency in the economy," and "reforming the government's revenue system by increasing the share of tax revenues." According to the economic officials of the eleventh government, the budget's dependence on oil revenues in 2015 was 33%, which is expected to decrease to 25% in the next year's budget bill. Mohammad Baqer Nobakht stated on Tuesday, February 16, 2016, in response to a question from Mehr News Agency, that the government's forecast for the realization of tax revenues this year is "at least 92%." The Vice President also reported that approximately 96% of tax revenues were realized last year.