The Forum for Partners in Iran's Marketplace
 
 
 
 
 
 
     

January 2003 / No. 21


Auto Industry

Refocus on Tax Issue

The following is the text of an article by Iran’s Minister of Commerce, Mohammad Shariatmadari, on the aggregate tax bill which aroused controversy and concern among some manufacturers that argued that the implantation of the bill might impede the production of some companies.

The aggregate tax bill does not disadvantage anyone and its implementation for goods and services will lend more clarity to Iran's economy. According to the bill presented by the government to Iran’s Parliament, its only goal is centralizing taxes for goods and services, and reducing or eliminating other national or local taxes has not been considered alongside it.

“All national and local taxes received from manufactured, intermediate and other types of goods will be brought together in one unit.”

It is certain that the implementation of this bill will be to the benefit of producers more than anyone else, as most of the manufacturing units have at one time or other objected to the current method of taxation.

In any case upon the implementation of the bill, all national and local taxes received from manufactured, semi-manufactured or any other types of goods will be brought together under one umbrella. The same condition has also been considered for imported goods and consequently all duties to be received from such commodities will be collected under the ‘admission duty’ label.

Admission duty will include commercial profit and custom fees. According to the newly considered custom tariffs, the fee will be fixed and the commercial profit will vary in line with the changing situation of the economy.

The most important modification within this bill will be a reduction in the number of decisionmakers on tariff rates. The new bill requires two commissions to hold sessions in order to decide on tariff rates, one being accountable to the Minister of Finance and Economic Affairs and the other to the Minister of Interior.

The implementation of this bill will not be to the disadvantage of the manufacturing sector but rather with the elimination of taxes – such as the 2% charged by the Ministry of Education and the 1% by the Physical Education Organization and so on – so manufacturers will benefit from it.

The contents of this bill are not to anyone’s disadvantage and its positive aspects will show themselves in the long run, but it is certain that the decisions made in this bill are to the benefit of the manufacturing sector in general and will not create any difficulties for them.

The idea that the government intends to eliminate all duties must not be promoted in society but by first taking into account the economic situation of the country and second, considering its pros and cons. The two commissions responsible for deciding annual tariffs may alter the tariff rates to be paid by industrial units as required.

 

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  Jan. 2003 / No. 21