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EghtesadOnline: The Iranian Parliament has formed a special committee to address pressing economic issues facing the country, with a special focus on the banking system.

According to Massoumeh Agha-Pouralishahi, a member of Majlis Economic Commission, the committee is slated to hold a number of meetings with Majlis Research Center (the research arm of the parliament), as well as representatives of the Central Bank of Iran, economy and intelligence ministries, and Iran Chamber of Commerce, Industries, Mines and Agriculture to address the challenges.

"Banking reforms, amendment of value added tax regulations and assessment of Justice Shares are on top of the commission's agenda," Agha-Pouralishahi was also quoted as saying by Banker.ir.

The government has prioritized banking reforms in its to-do list to comply with international standards and reconnect with the global banking system. In line with this, a banking reform bill proposed by the government is under the consideration of both the Cabinet and Iran’s Parliament, with the hope of introducing it this summer, Financial Tribune reported.

CBI has also devised a plan for Iranian banking system known as “2021 Roadmap” in which an innovative, flexible and strong framework for banks has been outlined. The roadmap requires the development of 12 new platforms for conducting banking operations and extending system support, six platforms for implementing monetary policies and eight platforms for promoting supervision.

In recent weeks, news about the insolvency of certain banks and credit institutions fueled by the bankruptcy of several shadow banks has given rise to rumors that the whole banking system might be at risk.

CBI officials have scrambled to tamp down such rumors, assuring depositors that their savings are safe with banks and institutions licensed by the regulator.   

Agha-Pouralishahi noted that in order to reform VAT regulations, meetings will be held with a 60-strong group comprising representatives of Iran National Tax Administration and other economic officials.

The VAT Law took effect in the Iranian year to March 2009 and has since taken a lot of flak for its ambiguities. One such criticism is that the law should not be levied on producers or importers in the first place and that only the final consumer must pay a 9% VAT rate.

Therefore, Majlis Joint Budget Commission, as part of the budget bill for the current Iranian year (March 2017-18) has tabled a motion to replace VAT with consumption tax that will become law upon the approval of lawmakers.

Proponents of the initiative believe the consumption tax system is simpler and more effective compared to VAT.

Iran Banking Iran parliament Iran Banking Committee