INTA Announces Cigarette Tax Rates

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

News ID: ۷۸۵۲۰۴

05 January 2020

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

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

Meanwhile, a 12% value added tax, 3% duties levied by the municipalities, 10% direct tax and 2% monopoly license are imposed on locally-produced cigarettes, according to Financial Tribune.

A total of 27% duties and taxes are levied on domestically-produced cigarettes.

Also, jointly-produced cigarettes are subject to a 37% tax and cigarettes made domestically with international brands are subject to a 42% tax, ISNA reported.

Eighty million cigarettes were exported during the eight months to Nov. 21, registering a 47% decline compared with the corresponding period of the last Iranian year, data by the Ministry of Industries, Mining and Trade show.

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

Iranians smoked 43.33 billion cigarettes during the period under review, showing no YOY change.

Ministry Slams New Cigarette, Tobacco Brands

The Iranian Tobacco Planning and Supervision Center's recent approval of new cigarette and tobacco production brands has been slammed by the Health Ministry.

The center, affiliated to the Ministry of Industries, Mining and Trade, recently approved of permits for 15 new brands of cigarettes and 30 new brands of tobacco, 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 fiscal 2014-15, adding flavor and taste to tobacco products and registering new brands are banned and amount to cigarette advertising. Note 3 of Clause 102 of the Fifth Five-Year Development Plan [2011-16] proposed the setting up of 20 tobacco factories to meet domestic demand,” Raeesi was quoted as saying by the Persian-language daily Etemaad.

“The Industries Ministry keeps on issuing new permits for the production of tobacco on the pretext of the hike in consumption and smuggling. Supervisory authorities fail to address health concerns and the Industries Ministry pursues its development policies for the tobacco industry.”

Raeesi also talked of influence peddling by big-money interests, the so-called cigarette mafia, to thwart plans for raising taxes on cigarettes.

“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 exercised by the powerful cigarette mafia in the country, our proposal to the parliament on raising cigarette tax by 10% that could generate 200 trillion rials [$1.55 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.”