Income Tax on Institutions Affiliated with the Leadership; From the Revolution's Table to the Mullah's Quilt

One of the controversial economic news this week was the obligation of the Astan Quds, the Executive Headquarters of Imam's Command, and the economic enterprises of the armed forces to pay taxes. If the past is a guide to the future, these controversies are a storm in a teacup. Especially since the mentioned clause has conditions for exempting these institutions from tax payment that have already been met. In this regard, and with the parliamentary elections approaching and the next presidential elections also on the horizon, it is unlikely that such proposals are anything more than a gesture of 'we are here' from hopeful parliamentary members and government officials. This past Saturday, media reported that within the framework of the 1398 budget law, the parliament approved that 'according to the supplementary clause 6 of note 9, in order to implement article (78) of the law on the addition of some articles to the law regulating part of the financial regulations of the government (2) and to implement article 30 of the Constitution, the Astan Quds Razavi and those institutions and economic enterprises under the armed forces and the Executive Headquarters of Imam's Command (RA), except for cases where there is explicit permission from the Supreme Leader regarding tax exemption or the manner of settlement, are obliged to deposit their taxes into the treasury under item 110112.' Although the parliament's resolution has reopened the sweet discussion of tax exemption for economic institutions under the leadership's control, it has left a loophole for tax evasion: explicit permission from the leader. The reality is that the aforementioned institutions all benefit from explicit permission from the leader. The discussion of tax exemption for institutions under the leadership's control has been a topic of conversation for years, but the transfer of the stewardship of Astan Quds to Ebrahim Raisi, a rival of Hassan Rouhani in the 96 elections and a competitor of the Larijani brothers regarding Khamenei's succession, has given the parliament and government a double motivation to address this issue. The favorable opinion of many IRGC commanders towards Raisi has also contributed to this, allowing the President, who is known for 'wisdom and hope,' and the Larijani brothers to hit two targets with one shot and bring the affiliated institutions of the armed forces into the fray. The tightening of the ground due to sanctions and the shrinking of the revolution's table is also not without effect. In recent years, this discussion was also widely raised in 96, and the Astan's response was clear: Firstly, the Astan pays taxes; secondly, where it does not, it has explicit permission from the leader. The second point is correct, and the first point looks good on the surface but is rotten underneath. Other institutions affiliated with the leadership also emphasize these two points as far as they respond. Those who are too powerful to respond likely murmur the same to themselves. To solidify their position, the Astan also attached a handwritten note from the 'Mostazaf' office to leave no doubt about the permission. In a letter, Mohammadi Golpayegani conveys Khamenei's opinion that according to the living Supreme Leader's view and in coordination with the late Supreme Leader's view, the Astan Quds is exempt from paying taxes except for obligatory taxes and value-added tax. The Astan also claims to pay both of these taxes. For transparency, it has been ordered that the Astan formally pay the performance tax to the government, and the government immediately returns it. Whether in a city of multi-thousand billion embezzlements, the Astan trusts the tax collectors in the executive branch to hand over the silent money to them with the promise that it will be returned immediately remains unclear. In the end, the Astan claimed, in the usual and legitimate complaints in the velayat system, that the government officials seeking money from the Astan are living comfortably on Astan properties and owe more than three thousand billion tomans to the guardians of the Astan. However, obligatory taxes and value-added taxes differ from corporate performance taxes. Although obligatory taxes have various types, they are ultimately taxes that others pay, and the Astan collects them on behalf of the government from others and delivers them to the government, with the most important part being the income tax of employees. The fact that the Astan deposits its employees' income tax into the government's treasury, if it does, is indeed a great favor in a country where even oil rigs go missing, but it has nothing to do with the main discussion. Value-added tax also has a similar story and is a consumption tax. Scholars may believe that taxing the expenses of the Astan's steward 'Sirajullah' is not legitimate, but the representative of the Imam of the Time apparently has a different opinion. It is almost certain that all the aforementioned institutions have dozens of similar letters in storage. Even if the Guardian Council does not consider the mentioned clause contrary to Sharia, which is unlikely given the escape route provided, ultimately these institutions have the leader's permission not to pay taxes. Given the current balance of power, it is unlikely that hopeful parliament members and government officials will want or be able to force the Supreme Leader with absolute powers and his surrounding 'Damet Barakat' and 'Saif al-Islam' to take the spoils of conquering Iran out of their pockets and put them in theirs. In any case, four decades after the coalition of the clergy and the market rose to the top, the dispute among the elites over the revolution's table is ultimately nothing more than a dispute over the mullah's quilt.