Do guilds also avoid transaction taxes?
Guilds are protesting against the tax office based on card reader transactions. An issue that pleased the president. Ebrahim Raisi said in a speech: Taxation of guilds should be based on trust, not card reader transactions. However, a member of the board of the chamber of guilds says that these words are not the basis of action. He sees the consequences of this procedure as the undergrounding of some transactions, including the use of cryptocurrency instead of common currency. Also, some reports indicate requests for cash or online transactions.
Guilds are the most populous segment of Iran’s economy, but the tax statistics they provide to the government say that this group only pays a little more than 5%, which means half of the taxes paid by private and public sector employees; However, the guilds also object to this amount, and their main objection is to receive tax based on card reader transactions, which, according to some findings, has only increased the tax of this group by one percent.
Among the consequences of this problem, we can mention the changing of the form of exchanges and its undergrounding by using cryptocurrencies, avoiding the acceptance of cards and the demand to receive cash or the online card-to-card method from trade unions. According to these reports, many citizens confirm that in some trade unions they are asked to use other methods instead of paying through a card reader, which in the case of online card-to-card payment, the transaction cost is borne by the buyer. Some consider this phenomenon to be comparable to the experience of doctors and lawyers who had previously minimized the use of card readers.
According to the members of the Chamber of Guilds of Iran, there is one trade union for every 25 people in the country, and if this practice, which they refer to as tax pressure, continues, many transactions will go underground, for example, transactions with cryptocurrencies. One of the board members of the Iranian Chamber of Guilds says that the government started the tax on card readers in the form of “punching”; No news was given to the guilds, and no training was given to the trade unions, and now many among the trade unions have been encouraged to go towards hidden transactions and not to use the card reader for financial transfers. Mehdi Omidred suggests that the President’s recent statements regarding taxation based on trust in trade unions should be followed up and not based on card reader devices. Words from the president’s side that are contradictory to the approval of the Cabinet of Ministers in this regard; However, according to trade union activists, the basis is still the card reader. The board member of the Chamber of Trades of Iran thinks that the best way is to follow up the words of the president by his first deputy and asks; If the guild tax is small, even though it is based on taxing the card reader, how have we acted when paying the same amount is accompanied by trouble and protest for this group?
Deljoi Ebrahim Raeesi of Asnaf
Guilds and businesses pay more taxes than in the past, and of course they are unhappy about this issue and they also have a voice in the government; Part of this increase in tax payments to the government is due to tax collection based on the amount received by trade unions from card reader devices; The eloquence of the guilds’ voice can be seen from the fact that despite the approval of this law and the continuous protest of this large segment of Iran’s economy, the president, in his recent trip to South Khorasan, said about the tax of the guilds among the elites of this province: Tax collection is based on trust in It is guilds. The statement of the trade association is a confidence-builder for the government. Raisi then clarified: The criterion of the government is not the card reader of the guild, but the tax declaration of that guild. Previously, the former president of the Chamber of Guilds strongly protested this issue; A protest that is threatening somewhere; Including threats to increase the price of services and goods by trade unions.
In his speech, Tahir Mohammadi talked about 4 basic problems with the central bank’s circular regarding the receipt of fees from trade card reader transactions. According to the former head of the chamber of trades, the first drawback is that according to articles 2 and 3 of the law on continuous improvement of the business environment approved in Bahman 90, executive bodies are obliged to ask the opinion of relevant economic organizations when drafting or amending regulations, directives and executive procedures, while the central bank He decided to collect the fee unilaterally without consulting the Chamber of Guilds of Iran, and such an action is clearly against the letter and spirit of the above law.
According to him, the second problem is due to hidden taxes from guilds. Explanation: Perhaps at first glance, the fees for card reader transactions may seem unimportant, but the total amount received from some trade units during a year, according to their type of business, is significant, and such amounts are used by most retail stores, which are a major part of the units. A queue covers the whole of Iran, it is imposed. It is enough to pay attention to this point; In the current situation where guilds are struggling with economic pressure and income reduction and besides that they are forced to pay all kinds of legal expenses including taxes, municipal duties, social security, etc. . Tahir Mohammadi added: The third problem is the unfairness of the approved method, because the majority of the pressure will be on the shoulders of those guilds whose sales are large but their amounts are small. Also, the fourth problem is that banks and PSP companies do not offer any services or privileges to trade unions. Collecting fees from card reader transactions and paying them to supplier companies will have two possible results. In the first case, it is possible that guilds will add money to the price of goods or services, which will ultimately be borne by the members of the society. In the second case, trades that do not increase the price will have to pay the fees out of pocket, which for example, for a trade unit that does 100 transactions less than 600,000 tomans per day, it will be about 5 million tomans per year. In this way and according to row 28 of the attached table number 2 of the circular, from July 4 of the current year, the owner of the card reader will be charged 120 tomans for each transaction up to 600 thousand tomans from the card reader during purchase.
Wristband or tax office?
Mehdi Omidre, a member of the Board of Directors of the Chamber of Guilds, says about this issue: the words of the President as the highest executive authority of the country had a positive feedback among the guilds, because he talked about trusting the guilds in the tax department, but unfortunately, it was not very effective in the discussion of transparency in the tax department. He continues: As a group of guilds, we presented everything we had in a transparent manner, but some points are not paid attention to in the tax affairs offices; Including the increase in rent and other costs of trade unions. Our point is that according to the President’s words, you should trust the guilds and the tax offices should also consider these costs in a transparent manner. According to him, this does not happen in practice, and card reader transactions were calculated from 1996 onwards.
This economic activist considers the year 1400 as the peak of this work and says: In this year, all card reader transactions in 2013 were checked by hand, while neither the guilds were informed nor trained. For example, someone who made a personal transaction and gave a loan to his relatives, it is also recorded in the calculation of his tax payment, and this is despite the fact that many business units have the financial ability to hire an accountant who is responsible for tax affairs and handling these matters. They don’t have to take over.
About one of the problems of the current system, Omidred says: Before, we used to lend money to each other and use card readers; The purpose of this work was to increase the bank’s rating for receiving loans, and the banking system was considered an incentive for loans. Now this path is disrupted and each trade unit has to give an explanation to the tax department for its smallest transaction.
In response to the question whether the President’s speech is now documented or the law approved by the Cabinet of Ministers, he stated: In the matter of transactions, the same procedure is still followed, and even the central bank went further than before and now fees are charged for transactions.
Pointing out that with the electronic payment method, both people, banks and guilds benefit, he says: Banks got rid of money printing, people got rid of carrying money, why should only guilds pay for it? In response to the criticism that guild units add this cost to their goods and services, this member of the board of the Chamber of Guilds emphasizes: such an issue cannot be raised in this discussion, and if there is a problem, it should be discussed in the discussion related to overselling and punishments. paid to it Our point is that in this whole process, the opinion of the Chamber of Guilds should have been considered as the representative of the guilds; If such a consultation was done, for example, our suggestion was to consider a facility for the trade union. Ambarid adds: Our concern now is that the level of underground and informal transactions will increase in order to evade taxes. Even today, we hear that many transactions in the market are done with a higher amount through cryptocurrencies, and this process is dangerous. In another part of his speech, he states: If you have heard, it is often said that the tax paid by guilds is around 5%; Now see how bad our performance has been that there is noise and protest over this 5%. He confirms that a number of trade unions no longer use POS devices to avoid paying the card reader tax. Amidar concludes: Another big problem that is being implemented like a tax office without a plan and training is the system of taxpayers and store terminals, which will definitely cause problems for the entire payment and tax system.
This member of the board of the chamber of trades ultimately considers the best way to pay attention to the president’s words and describes the follow-up by the first vice president as a fundamental step for its implementation.
Source: World Economy