Homegrown hybrid, electric vehicles exempt from VAT

November 12, 2017 - 20:0

TEHRAN — The Iranian Tax Administration has exempted domestically manufactured hybrid and electric vehicles from value added tax (VAT), IRNA reported on Sunday.

As per the clean air law, adopted by the Iranian parliament on July 16, 2017, all homegrown, ecofriendly, zero-emission hybrid and electric cars and motorcycles are subjected to exemption from tax, Mohammad Masihi, an official with the tax administration said.

The law has also tasked the ministries of interior and industry along with customs administration to set up five-year transport fleet renewal schemes by granting loans, offering incentives and removing import duty on hybrid and electric cars and motorcycle.

Choking air pollution troubling citizens in metropolises has urged the need to develop ecofriendly and green transport as a replacement for old, high emission transport system known as the main cause of severe air pollution. 

However, swapping the old vehicles for newer and greener models bear high costs and entails abundant resources and strong infrastructure. 

Direct emissions are emitted through the tailpipe, through evaporation from the fuel system, and during the fueling process. Direct emissions include smog-forming pollutants (such as nitrogen oxides), other pollutants harmful to human health, and greenhouse gases (GHGs), primarily carbon dioxide. All-electric vehicles produce zero direct emissions, which specifically helps improve air quality in urban areas.

Plug-in hybrid electric vehicles (PHEVs), which have a gasoline engine in addition to an electric motor, produce evaporative emissions from the fuel system as well as tailpipe emissions when operating on gasoline. However, because most PHEVs are more efficient than comparable conventional vehicles, they still produce fewer tailpipe emissions even when relying on gasoline.


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