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EghtesadOnline: Iran produced 35.3 billion cigarettes during the first eight months of the current Iranian year (March 21-Nov. 21) to register an increase of 20% compared with last year’s corresponding period.

The country had produced 29.3 billion cigarettes during last year’s corresponding eight-month period, the Persian economic daily Donya-e-Eqtesad reported, citing data from the Ministry of Industries, Mining and Trade.

Eighty million cigarettes were exported during the eight months to Nov. 21, registering a 47% decline year-on-year, Financial Tribune reported.

Imports were close to zero while smuggling stood at 8.16 billion, indicating a 42.6% decrease YOY. 

A total of 43.33 billion cigarettes were smoked during the period under review, showing no YOY change, IRNA reported. 

However, the Health Ministry slammed the Iranian Tobacco Planning and Supervision Center's recent approval of new cigarette and tobacco production brands.

The center, affiliated to the Industries Ministry, recently approved permits for 15 new cigarette brands and 30 new tobacco brands, requested by 28 tobacco companies.

Deputy Health Minister Alireza Raeisi said the decision is against the law and even shows contempt for Iran’s commitments to the World Health Organization.

“According to the guidelines of the National Tobacco Control Headquarters drawn up in its ninth meeting in [the Iranian year] 1393 (March 2014-15), adding flavor and taste to tobacco products and registering new brands are banned and amount to cigarette advertising,” Raeesi was quoted as saying by Persian-language daily Etemad. 

“Note 3 of Clause 102 of the Fifth Five-Year Development Plan [2011-16] proposed setting up 20 tobacco factories to meet domestic demand. The Industries Ministry keeps on issuing new permits for the production of tobacco on the pretext of the rise in consumption and smuggling. Meanwhile, supervisory authorities fail to address health concerns and the ministry pursues its development policies for the tobacco industry.” 

Raeisi also talked of influence peddling of big-money interests, the so-called cigarette mafia, to thwart the plans for raising cigarette tax.

“Iran has the cheapest cigarettes in the world. The lowest rate of tax is being imposed on tobacco products in Iran whereas there is definitive evidence that tobacco taxes reduce smoking. But thanks to the influence of the powerful cigarette mafia in the country, our proposal to the parliament on raising cigarette tax by 10% that could generate 200 trillion rials [$1.45 billion] in revenues for the country was rejected. The United States has sanctioned imports of pharmaceuticals our people need, yet a couple of its major tobacco companies keep on selling cigarettes to us.” 

The Iranian National Tax Administration recently announced duties and tax rates applicable to imported and locally-produced cigarettes in the current Iranian year (March 2019-20).  

Imported cigarettes are subject to a 12% value added tax, 3% duties levied by the municipalities, 26% import tax, 1% tax levied by the Red Crescent Society of Iran, 40% direct tax and 10% tax on government-granted monopoly license. 

All in all, a 92% tax is levied on imported cigarettes. 

This is while a 12% value added tax, 3% duties levied by the municipalities, 10% direct tax and 2% government-granted monopoly license are levied on locally-produced cigarettes. 

A total of 27% duties and tax is applicable to domestically-produced cigarettes. 

Jointly-produced cigarettes are subject to a 37% tax and cigarettes made domestically under international brands are subject to a 42% tax. 


Growth Output Iran Cigarette Cigarette Output