Iran’s industrialists have little hope to change heavy social security tax - minister (EXCLUSIVE)

Business Materials 10 July 2016 15:59 (UTC +04:00)

Tehran, Iran, July 10

By Mehdi Sepahvand – Trend:

There is a little hope that any change may happen about the heavy tax that Iran’s industrialists have to pay to the Social Security Organization, Minister of Industry, Mine, and Trade Mohammad Reza Nematzadeh said.

“The issue is a thing of law and changing it is not so easy,” the minister told Trend July 9 on the sidelines of a conference marking Iran’s Industry Day.

“The Social Security Organization believes the pensions and health services that it gives cost so much,” he said, adding however that “a systemic change is needed.”

Nematzadeh’s comments came as industrialists are anticipating a meeting with the Social Security Organization and its parent Ministry of Labor soon.

The prospective meeting was promised by officials of the Ministry of Industry, Mine, and Trade as well as the Parliament who were present at the conference.

The officials’ promise followed repeated objections by the industrialists of the burden that the taxation has imposed on them.

One of the industrialists, interrupting the host as he spoke from his seat, said that the heavy taxation has deprived him and his likes in the industrial sector of the chance to allocate any budget to research and development programs and run their industries outdated.

According to the law, enterprises in Iran have to pay 30 percent of their revenues to the Social Security Organization for insurance.

Many doubt the fact that the insurance services would cost so much. As one, Chairman of Razavi Khorasan Textile Association Ebrahim Dehqan had recently said there are other insurance companies that would offer the same insurance for half of what the Social Security Organization charges.

According to a 2014 report by the Iranian parliament, corruption was widespread in the Social Security Organization during the administration of Saeed Mortazavi, 2011-2013. It included, among other officials of the Islamic Republic of Iran, a notable number of members of parliament (MPs) and several editors of Reformist newspapers.

The 84-page report by the Special Parliamentary Probe Committee included 37 cases of bribery and illegal handouts. One such case entailed 1.335 billion rials ($43,266) “taken from the internal budget of the organization after being authorized by the head of the organization, and was given to 37 MPs [report included code numbers but no actual names] as gift cards [on April and May] of this year.”