Iran Showcases Smart Taxation as a Knowledge Export Platform to BRICS

TEHRAN (Iran News) Speaking after the recent meeting of BRICS tax chiefs — attended by senior officials from Iran, Russia, China, Brazil, the United Arab Emirates, South Africa, Indonesia, and Egypt — Sobhanian said digital transformation in tax systems has become essential for good governance, transparency, and sustainable development across member states.

BRICS, which now counts 10 core members including Iran, represents 30% of the world’s landmass, 40% of global GDP, half the world’s population, and more than $500 billion in intra-bloc trade. Member countries have been working to reduce reliance on the US dollar in trade by expanding bilateral and multilateral monetary arrangements and by strengthening digital tax systems to support growth.

Over recent years, INTA has implemented comprehensive digitization and data-driven reforms, focusing on taxpayer-centric services and the use of modern technology to streamline compliance. Sobhanian noted that this transformation has eased domestic procedures, raised voluntary compliance, and earned praise from BRICS partners.

One innovation that drew special attention was Iran’s “tax tagging initiative,” designed to make the system more transparent and encourage civic participation in funding infrastructure. BRICS countries are considering adopting aspects of this approach.

Iran’s growing reputation in this field was underscored by a recent agreement with Russia to send a high-level delegation to Iran to study its systems for self-declaration and pre-filled tax returns. Sobhanian said these steps demonstrate the maturity of Iran’s tax regime and its contribution to building sustainable, fair, and intelligent public-finance frameworks.

Sobhanian outlined three main pillars of Iran’s approach:

Taxpayer-Centric Management: Taxpayers are treated as strategic partners, with services designed to simplify compliance and improve satisfaction.

Over 12 million taxpayers now have dedicated digital accounts, enabling them to submit and track returns and requests online without visiting tax offices.

Twenty licensed Tax Service Providers (TSPs) operate nationwide, handling about 80% of electronic invoices; their costs are covered by value-added tax (VAT) revenues.

A dual-approval system requires both buyers and sellers to confirm electronic invoices, ensuring transparent transactions and mutual awareness of tax obligations.

Pre-filled VAT and income-tax returns have been widely adopted, reducing disputes and cutting processing time.

Innovations in VAT Administration: Iran’s VAT system now operates on the backbone of electronic invoicing, with over 3.6 million goods and services coded and taxed in accordance with the law.

Pre-filled VAT returns, based on e-invoice and banking data, have lowered compliance costs and boosted declared revenues — with a reported 11% rise in declared taxes in the first year of e-invoicing.

The share of VAT credits based on paper invoices dropped from 34% in summer 2023 to just 11% by spring 2024, and paper invoices will cease to be accepted from December 2024.

Faster refund processing now benefits businesses whose transactions are fully documented electronically.

Firms can defer VAT payments on credit sales until cash is received, helping maintain liquidity.

Data-Driven Taxation: Iran’s tax authority has logged over 16 billion e-invoices, with daily volumes growing rapidly.

Data from banks and customs authorities supplement these records, allowing the use of data-mining tools and automated debt-management systems to verify declarations, detect discrepancies, and cut enforcement costs. “Smart Taxation”

Sobhanian said Iran is ready to share its experience in digital VAT administration, e-invoicing, compliance enhancement, and self-regulation models — including applications of game theory — through webinars, workshops, and in-person exchanges in Iran or abroad.

He emphasized that smart taxation is not just a domestic reform but also a strategic exportable knowledge asset, enabling Iran to play a constructive role in shaping fiscal governance across BRICS.

“The success of our digital tax transformation reflects our commitment to fairness, transparency, and sustainable revenue generation,” Sobhanian said, highlighting Iran’s readiness to cooperate with BRICS partners in building next-generation tax systems.