65% duty imposed on imported cigarettes 

August 3, 2019 - 15:25

TEHRAN- According to the value-added tax law, a 65% duty is imposed on imported cigarettes, announced the deputy health minister for management and resources development. 

“According to the law, a 40% tax should be levied on cigarettes that are produced inside the country with foreign brands and 24% on cigarettes that don’t have a foreign brand,” Kamel Taqavinejad said.

He made the remarks during a meeting on “reviewing tobacco taxes”, IRIB reported on Tuesday. 

Moreover, there should be a 10% duty on raw imported tobacco and 35% on processed tobacco, he added. 

“According to the law, the taxes on tobacco should annually increase by 5%,” he said. 

“The tax rate ceiling for local products is at 60%, 95% for foreign brands of cigarettes that are produced locally and 125% for imported cigarettes,” he added. 

Over the meeting, Deputy Health Minister Alireza Raisi, said the 150% increase in cigarette price is good, but not enough. 

“The rising price of cigarette was not only caused by taxes, but also by inflation,” said Raisi. 

“Iran has successfully complied with World Health Organization’s Framework Convention on Tobacco Control (WHO FCTC), except from the frameworks’ 6th clause which was about levying higher taxes on tobacco,” he said. 

“In [Iranian calendar] year 1393, a proposal was made for increasing tobacco tax revenues from the current 20 trillion rials (around $476 million) to 120 trillion rials ($2.8 billion), but unfortunately the plan did not go into operation,” he added. 

The WHO FCTC was developed in response to the globalization of the tobacco epidemic. The spread of the tobacco epidemic is facilitated through a variety of complex factors with cross-border effects, including trade liberalization and direct foreign investment. Other factors such as global marketing, transnational tobacco advertising, promotion and sponsorship, and the international movement of contraband and counterfeit cigarettes have also contributed to the explosive increase in tobacco use.

Article 6 of this treaty proposes “price and tax measures to reduce the demand for tobacco.” 

Tobacco use rising in the country

In January, the vice chancellor of Tehran University of Medical Science, announced that tobacco use in Iran has increased by seven times over the past decade, growing from 2,000 tons to 15,000 tons. 

According to Abdolrahman Rostami, tobacco tax revenue for the next Iranian calendar year (starting March 21, 2020) is estimated at 28 trillion rials (around $666 million) but it should grow to 150 trillion rials (around $3.5 billion). 

Earlier in June, Tobacco Prevention and Control Research Center announced that about 12 percent of Iranian adults above 15 years old are daily smokers.

Including hookah smokers, the percentage of smokers reach about 20 percent, the report added.

According to the head of the center, Gholamreza Heidari, about 20 percent of men and two to three percent of women are daily smokers.



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