NICOSIA — Iran, in a rare concession, has suspended a sales tax in
wake of a strike by merchants.
Iranian President Mahmoud Ahmadinejad ordered the government to suspend
a new tax that sparked unrest in the nation's business community, Middle East Newsline reported. The
three-percent sales tax had been imposed in September 2008 amid the drop in
the price of crude oil.
Officials said the Iranian government depends on crude oil exports for
80 percent of the state budget. Taxes comprise the remaining portion of the
Crude oil prices have fallen by nearly 50 percent since July 2008. The
drop in prices was said to have fueled a recession in Iran.
"The tax will be suspended for up to three months," an Iranian source
Ahmadinejad intervened in the crisis after scores of merchants, led by
goldsmiths, shut their businesses in protest of the tax on Oct. 8. The
Iranian president has blocked other unpopular economic measures, including
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"We've had no agreements, but all our efforts are aimed at convincing
the merchants to open their shops," Iranian Guilds Association director
Mohammed Azad said.
"This has pushed the government to announce that it will review the new
VAT [value added tax] mechanism," Iran's Press TV said.