Iran's tax department revised a drastic tax increase for merchants after the initial decision led to strikes in the Tehran Grand Bazaar, state media reported Tuesday.
After a meeting between officials of the tax department and representatives of the Guild Council, the decision to raise the taxes by up to 70 per cent was revised and reduced to 15 per cent, Press TV reported.
The head of the council, Qassem Nodeh-Farahani, said the initial hike had been revoked and a new guideline issued, DPA reported.
The merchants of the bazaar, one of the country's most important economic centres where countrywide prices are regulated, had threatened to close down their shops for good if the tax hike was not revised.
The opposition tried to present the strikes as politically motivated, but observers regard them as being more of an economic nature.
The government is trying to implement reforms to improve the economy, including ending subsidies on energy and food and hiking the bazaar tax.
The Grand Bazaar merchants are a powerful economic group and are also politically significant and their opposition could weaken President Mahmoud Ahmadinejad's government.