Considering the significant decline in Government’s incomes following the decrease in the price of oil in global markets, economic decision makers seeking to enhance the country’s taxation system and to increase the share of taxes in government’s revenue. This, in fact, was realized by substantial surge in taxes in certain sectors of the economy including construction, but the capital market followed a different path from what was mentioned above. Taxes on stock transactions not only did not increase, but recently Dr. Mohammadi, CEO of the Securities and Exchange Organization declared the elimination of taxes over transactions which lead to loss, a news that arouse different reactions within those active in the capital market. Some interpreted this incident as favorable since in a transaction with loss, no income has been gained to be taxable. However, some other experts see this as the groundwork for levying 25 % taxes on profitable transactions in the future, an analysis that agitated the capital market.
However, Mohsen Khodabakhsh, supervising director of the Securities and Exchange Organization strongly denied this news and declared that considering the globalization trend that has been happening in many sectors of the economy, and bearing in mind the average tax rate among financial markets in various countries, the Securities and Exchange Organization together with the Iranian National Tax Administration has the intention of lowering the 0.5 percent share of taxes on transactions. Considering that dividends of the companies that in fact belong to shareholders have become eligible for 25 percent taxation, therefore levying another tax on stock transactions will be double taxation and can be regarded as imposing an additional cost on shareholders. This shows that reforming the taxation systems, not only does not mean increasing taxes in various sectors of the economy, but on the other hand there is a need to decrease tax rates in certain sectors in order to avoid imposing further costs to stakeholders.
Beside all the points mentioned above, it can be stated that imposing taxes over stock transactions in financial markets has unfavorable effects over stock prices, market volatilities and liquidation, all of which will eventually lower the efficiency of the market. Various studies show that considering the negative effect of taxation over the movement of stocks regardless gaining profit or loss, the rate of taxation has been decreased or eliminated totally in developed markets, which has ultimately paved the way for higher competitiveness and as a result lower transaction costs and market risk. Therefore, capital market officials in Iran, together with Iranian National Tax Administration, are trying to decrease the tax rates which can be the groundwork for fundamental developments within present structure of transaction costs in Iran’s capital market. If such measures are executed in the short term for transactions commissions which are much higher than global standards, it can gradually help enhance the procedure of transactions.