EghtesadOnline: The Iranian Parliament has approved on Tuesday the exemption of following goods and services from value added tax:
Livestock and their feed, seeds, seedlings, saplings, pesticides and fertilizers, agricultural water, dairy products, eggs from poultry birds, flour and bread, meat and meat products, rice, pulses, soybeans, soy protein, paper pulp, wastepaper, notebooks, publication paper, newsprint, print and digital newspaper, immovable properties, hand-woven carpets and their raw materials, locally-made handicrafts, pharmaceuticals and veterinary and human vaccines, treatment and rehabilitation equipment, radar and distant measuring equipment, military, intelligence and defense equipment.
According to Financial Tribune, the exemptions also pertain to services associated with disease treatment, diagnostic and disease prevention, rehabilitation services, services offered by cemeteries, treatments for livestock and plants, agricultural water mechanization, plant tissue culture, printing services (books, newspaper and periodicals), banking services, loan arrangement services and surety bonds made under the rules and regulations introduced by the Currency and Credit Council.
Parliamentarians returned the articles on VAT exemption of gold ingots, paper or electronic drafts, newspaper and magazine advertisements, services offered by writers, directors and producers (cinema, TV and theater), photography and movie editing services to the Economic Commission for revision, IRNA reported.
A value-added tax is a consumption tax levied on a product whenever value is added at each stage of the supply chain, from production to the point of sale. The amount of VAT that the user pays is on the cost of the product, excluding the costs of materials used in the product that have already been taxed.
The VAT in Iran stands at 9%.
More than 160 countries use value-added taxation and it is most commonly found in the European Union. But it is not without controversy.
Advocates say it raises government revenues without punishing success or wealth, as income taxes do, and it is simpler and more standardized than a traditional sales tax, with fewer compliance issues.
Critics charge that a VAT is essentially a regressive tax that increases economic strain on lower-income taxpayers and also adds bureaucratic burden on businesses.