INTA Declares Covid Relief Measures for Tourism Industry

EghtesadOnline: The Iranian National Tax Administration has announced relief measures extended to tourism industry, which has been harshly hit by the Covid-19 pandemic.

News ID: ۷۸۶۳۷۸

21 April 2021

The relief measures include exemption from late payment penalty. Taxpayers who cannot afford to pay their dues are allowed by the Economy Ministry to settle their debts in 36 installments (upon proof of their financial state).

The Cultural Heritage, Tourism and Handicrafts Ministry had proposed a value added tax delay to support the industry, saying that no transaction has been conducted over the past couple of months because all travel agencies were closed.

Related businesses believe that the government needs to offer tax exemption to tourism industry for the fiscal 2019-20 and 2020-21, and provide social welfare to employees of this sector.

“The outbreak of coronavirus has so far caused losses worth 120 trillion rials [$430 million] to Iran’s tourism industry,” Minister of Cultural Heritage, Tourism and Handicrafts Ali Asghar Mounesan said in September.

“Only 1.75 trillion rials [$6.2 million] of the sum have been compensated in the form of loans to those active in tourism industry. Insurance premium and loan repayment breaks were among emergency measures offered to reduce the economic impact of Covid-19 recession on tourism.” According to the minister, only 74 foreign tourists visited Iran during the first quarter of the current Iranian year (March 20-June 20) compared with 2.3 million in the same period of last year.

Travel agencies have repeatedly expressed their dissatisfaction over the government's support packages.

Hormatollah Rafiei, the head of Travel Agencies Union, said travel agencies have reduced their workforce from 50,000 before the pandemic to 10,000 at present.

"Despite government claims, not only the tax administration has offered no relief for travel companies, but has also become stricter," he was quoted as saying by Tehran Chamber of Commerce website.

Some 30% of Iranian hotels have closed down since the outbreak of the pandemic and the ones remaining open are offering special discounts of up to 70% on their services, according to the head of Iran’s Hotel Owners Society.

“The industry has suffered a total of 85 trillion rials [$304 million] in losses due to the pandemic and the drastic decline in domestic and international tourism,” Jamshid Hamzehzadeh was quoted as saying in October.

The official said around two-thirds of jobs have been lost in the country’s hotel industry since the Covid-19 outbreak.

The negative impact of pandemic on travel industry is not limited to hotels or large businesses.

Mahdiyeh Jahangir, a tour guide, told the Persian-language daily Iran, that no one accepts responsibility for the unemployment of tour guides.

“There are 10,000 tour guides in Iran and as they don’t have an employer, they usually don’t have insurance coverage and consequently can’t receive unemployment benefits. We only have a tour guide ID card and nothing else,” she said.

Vali Teymouri, deputy minister of tourism, says the grace period for repaying low-interest loans that offered as part of the government's aid package against the impacts of the pandemic has been extended.

"As per the new decision, businesses active in travel and tourism industry are allowed to start repaying their loans as of Sept. 21," he was quoted as saying by the ministry's news outlet.

The government bailout for tourism businesses has been put at 160 million rials to 9 billion rials ($640-36,000), based on the type of services offered, which must be repaid over two years at a 12% interest rate.