VAT; Disaster for the producer and consumer
The economist believes that in the shadow of the VAT law in the country, this tax is levied on both producers and consumers, which has led to an unreasonable increase in prices.
According to the International Iranian Stone Exhibition, Arash Kabiri, referring to the problems that VAT has created for producers, said: In all countries, VAT is paid by the consumer and people like tourists are exempt from paying it. In case of payment, they can also refer to the tax office and receive the payment amount.
"Unfortunately, VAT is levied at the source in the country," said the economist. This means that the importer of raw materials used by the factories pays VAT money. The intermediary who is a business intermediary and brings these materials to the factories is also subject to VAT, which is against the law.
He added: "In the shadow of the VAT law in the country, this tax is levied on both producers and consumers, which has led to an unreasonable increase in prices." Part of the increase in government prices and inflation is the result of this increase in the VAT rate.
In response to the question whether the collection of VAT will pave the way for an increase in imports, Kabiri said: "Certainly, the continuation of the process of collecting VAT can pave the way for an increase in imports." In other words, as long as we collect taxes on all goods according to the VAT law, the cost price of the goods is much higher than similar foreign goods, which can be a green light to increase imports into the country.
Regarding the sale of products without invoices, he said: "Currently, many manufacturers can sell their products without invoices, because in this case, the violation will not be dealt with seriously."
"In general, you should keep in mind that VAT alone has not boosted the growth of the underground economy," said the capitalist, referring to the boom in underground activities due to the incorrect implementation of the VAT law. Which is carried out by the Finance, Social Security, Standards and the like organization has paved the way for the prosperity of the underground economy.
He added: "Unfortunately, at the moment, the complicated tax, insurance laws and very difficult conditions for obtaining business licenses have led some manufacturers to conclude that they can resume their activities without obtaining a license, because in this case, the costs are relatively high." It does not have transparent manufacturing companies and can produce at a lower cost. Together, these factors have led to the growth of the underground economy compared to before VAT.
Regarding whether VAT has made transparency more costly, Kabiri said: "Increasing tax overhead costs, such as VAT, can be a barrier to healthy activity, so that in some cases people seek to circumvent the law." To reimburse their expenses in this way. VAT has made it economically viable to operate in the underground sector of the economy, despite the high costs and risks.
Regarding the fact that the tax paid by the producers stays with the tax office for up to six months and causes a lock in liquidity, he said: The objections to the VAT law can also be sought in this issue, because this type of tax It locks up the cash that should run the production lines and generate revenue, which can also reduce production incentives.
According to him; Money that stays with the tax office for 6 months can enter the production cycle and contribute to economic prosperity. Unfortunately, the administrative bureaucracy of the country is such that production is slow.
In the end, Kabiri pointed out about tax discrimination: "Paying taxes will make the country prosperous and prosperous." So that the government can provide more and better services in the shadow of taxation, but in the current situation, the tax is limited to the productive sector.
The economist continued: "The existing discrimination is annoying. If our economy was production-oriented instead of bank-oriented and production and producers were supported, we would no longer see discrimination and liquidity would not be eroded in banks, but would be injected into industry and agriculture."
It is worth mentioning that 11 years after the implementation of the VAT law, many manufacturers are protesting against the way of receiving this type of tax, which unfortunately has not been changed and amended to date, which is a matter for consideration.
According to Article 17 of the VAT Law, taxes collected from producers will be deducted or refunded if they have a valid sales document and invoice. This has not happened much to date, which has been the main cause of dissatisfaction of many producers.
Also, by hitting VAT from the productive sector of the economy, it has caused a lot of overhead costs to the domestic producer; The import sector is mainly imported due to smuggling of goods, without paying customs duties and VAT, and performance taxes are also paid by domestic producers. This has led to the fact that the cost of taxes on imported goods is much lower than that of domestic producers.
