Page 22 - IRANRptJul18

6.1.1 Budget dynamics - tax issues
Iranian customs slaps 10% flat rate duty on cosmetics as officials squeeze black market
Tehran bans kiosk tobacco sales
Iran collects $17.7bn in taxes across first 11 months
The Islamic Republic of Iran Customs Administration (IRICA) is slapping a 10% flat rate duty on imported cosmetics under the budget law, Tasnim News Agency has reported.
Cosmetics have grown in popularity in Iran in recent years, with several European brands setting up operations in the country. The officialising of the cosmetics industry has helped the government claw back money that previously went the way of illegal importers. Illicit imports flow over the border with Iraq or arrive in wooden dhows that cross over from the United Arab Emirates.
IRICA’s directive states that all goods classified under 3303 and 3304 are subject to a 10% tax levy in accordance with the current Persian year’s annual budget. The year began on March 21.
According to a June 9 report from Iran Student News Agency, a government-owned company, which licenses the kiosks to independent traders, issued its diktat with the objective of stopping the sale of black market cigarettes. The kiosk traders have been left to sell other items including snacks, drinks, cigarettes and newspapers, while the supermarkets hoover up their tobacco revenue streams.
Several kiosks have already been served with notices and others have been shut down for flouting the recently imposed rules.
Iranian social media was set alight by the cigarette sales ban. There were many suggestions that the new ruling would be short-lived because the livelihoods of the retailers could be severely damaged by the rule.
Tehran City Council said that smoking rates in the country are rapidly growing, with some €2mn a day being spent on the unhealthy habit.
The Iranian Health Ministry has previously stated that the revenues from smoking amount to just one-third of the cost of treating conditions caused by not kicking the habit.
The Iranian Tax Administration (INTA) announced on March 6 that it had collected IRR800tn ($17.7bn) in taxes during the first 11 months of the current Persian Year (ends March 20), according to Fars News Agency. The Rouhani administration has cracked down on several government entities and thousands of private businesses since 2014 when, for instance, VAT became mandatory on all product sales.
22 IRAN Country Report July 2018 www.intellinews.com