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Iran prepares for sweeping economic reforms

Source: Press TV

Official figures put the annual inflation in Iran at 29.4 percent in the twelve months that ended in September. The Iranian president has proposed a sweeping economic reform package he says will ease the problem.
Tehran has launched a campaign to promote an economic reform plan after parts of the proposal faced public disapproval in October.

In July 2008, the Iranian government announced that a value-added tax (VAT) mechanism would be introduced in the country by autumn, under which businesses would have to pay 3 percent of their sales receipts as tax.

As the date for the implementation of the plan approached, merchants from Tehran's Bazaar -- the commercial heart of the country -- went on strike in protest at the VAT plan.

Following 10 days of widespread demonstrations across Iran, President Mahmoud Ahmadinejad announced that he would introduce a bill to delay the implementation of the tax mechanism by at least one year.

According to Tabnak, economic experts in the country have launched a campaign directed at ending the controversy surrounding the reform proposal; the plan is currently being discussed in various economic circles.

Critics of the plan demand that the Iranian government permanently revoke the program, arguing that the mechanism would contribute to creeping inflation.

Proponents of the plan, however, insist that VAT will help the country shift its dependency from oil revenues to indirect taxation.

The committee responsible for promoting the reform plan is actively organizing meetings and briefings across the country to prepare Iranian commercial circles for the long-anticipated economic changes.

President Ahmadinejad has long promised a populist economic platform that would challenge cronyism and corruption.

After 4 years of Ahmadinejad administration, however, the Iranian president has been the recipient of severe criticism.

Sixty leading economists from major Iranian universities have recently criticized the president in an open letter, saying he has not taken corrective measures to deal with the economic decline in the country.

President Ahmadinejad responded to the criticism by saying that his economic reform package -- submitted to parliament -- will eventually be able to resolve the economic problems gripping the country.

... Payvand News - 12/24/08 ... --

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