Iran exempts inbound tour operators from VAT

May 28, 2019

TEHRAN – Iranian travel agencies have been exempted from value-added tax (VAT) in order to encourage the county’s budding tourism sector.

VAT has been waived for travel agencies taking [package] tours to Iran upon the order of First Vice-President Es’haq Jahangiri in a bid to increase the number of foreign tourists visiting the country, CHTN reported.

The decision was made upon a proposal by Cultural Heritage, Handicrafts and Tourism Organization Director, Ali Asghar Mounesan, the report said.

“The arrival of travelers to the country is one of the most important instances of service exports. Please find a solution to help this channel work in progress in the current situation that other channels for export of commodities are facing problems,” Mounesan wrote in a letter to Jahangiri.

In December 2017, Ebrahim Pourfaraj, who heads the Iranian Tour Operators Association, defined the VAT as a “serious threat” to the tourism sector, urging for its immediate elimination.

“International [tourism] companies accuse us of deception and abuse of state regulations to enforce this tax,” he said in an address to cultural officials, lawmakers and travel associates from both state and private sectors.

Pourfaraj also warned policymakers about the vows of 166 travel agencies which had cautioned to stop organizing tours to Iran if the tax is not abolished.

Iran expects to reap a bonanza from its numerous tourist spots, including 22 ones that have been placed on the UNESCO World Heritage list.

The country has launched extensive plans to bolster its tourism sector. Under the 2025 Tourism Vision Plan, it aims to increase the number of tourist arrivals from 4.8 million in 2014 to 20 million in 2025.

AFM/MQ/MG

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