Iranian Merchants Win One on Taxes, no Chai Party………….
“After just one day of protests, the Iranian government has retreated from its proposed 70% hike in the income tax for merchants and traders in bazaars. On Tuesday, gold and jewelry vendors shut down Tehran's old bazaar in protest of the government's proposed tax hike. The discontent spread throughout the typically bustling bazaar as all garment, cloth and women's chador vendors slammed down their shutters and continued the strike. Local merchants said that they did not trust the government and tax office and are already hard hit by the economy. Amir, a garment vendor, keeps a wad of bounced checks in the drawer of a table in his stall. "Many of my clients who used to buy large quantities of garments can no longer pay their installments," he said. "Last month, I received more than [$40,000] in bounced checks. I cannot get my money back, so how can I afford to pay 70% more in taxes?"……”
If the figure of 1.5% for economic growth for 2009 is correct, it is indeed dismal for a developing country, especially for a country as rich in resources as Iran. The Iranian government must have spent a lot of resources in buying voter satisfaction before the last elections, through subsidies. It may not be a coincident that Mr. Ahmadinejad is proposing deep cuts in subsidies this year, especially now that he cannot run for reelection in 2013. He doesn’t need to keep voters happy. But his problem is that the members of parliament have to run again and they do not seem in a mood to appease him now.
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