Official: Improper taxation forces many pharmacies close down in Iran

Business Materials 26 May 2013 12:34 (UTC +04:00)

Azerbaijan, Baku, May.26 / Trend F.Karimov/

Many pharmacies in Iran have been closed down as a result of improper taxation methods, Asr-e Iran website quoted head of Tehran pharmaceutical association, Jalil Saeedlou, as saying.

The tax organization wants pharmacies to issue invoices for each medicine subscription. This is impossible and will face both pharmacies and people with problems.

"People are grappling with medicine shortage. How can we add to their problems through taking such decisions?" he added.

Member of the taxation working group of Iran pharmaceutical association Mohammad-Kazem Pourkazemi said for his part that a pharmacy which earns 7 million rials per day will not be able to pay 180 million rials tax per year.

Some 8500 pharmacies are in operation in the country, of which 1700-1800 are in Tehran, he noted.

Another official, Mohammad-Reza Dorri, said that 10-15 pharmacies are being transferred to other persons each month due to the fact that the job is not economically justified.

Iran's Finance and Economic Affairs Ministry has Set the target of 430 trillion rials (about $35 billion) in tax incomes for the next Iranian calendar year, while the State Tax Affairs Organization has cast a doubt on realizing the goal, ILNA reported.

The organization said that this year's tax revenues had been projected to hit 360 trillion rials (about $29 billion), but just 90 percent of the planned sum will be earned in the most optimistic case.

On January 1, the Fars News Agency reported that the Iranian administration earns about 43 percent of its current budget through tax incomes.

According to the fifth five-year national development plan (2010-2015), 100 percent of the needed sum should be secured through tax incomes by the final year of the plan, he added.

Some 10 percent of Iranian people are unable to pay medical treatment costs for hard-to-cure diseases and such costs have left them destitute, the Mehr News Agency reported.

The number of families who have gone below the poverty line has recently increased due to the fact that they are unable to make for huge medical costs, he noted.

Due to western-led sanctions, only a handful of international banks are willing to transfer currencies on behalf of Iran to purchase medicine, which is leading to a shortage of imported drugs, Rasoul Khazari, a member of the Iranian parliament's health committee, said in November.

Costs of medical equipment have also soared, rising an average of 245 percent due to the decline in the value of Iran's national currency, Hossein-Ali Shahriari, the health committee's head, said on Nov. 10, 2012.

Although trade in medicine is exempt from international sanctions imposed by the UN Security Council and the unilateral sanctions announced by the U.S. and EU, Iranian importers say Western banks have been declining to handle it.

The U.S. and EU have placed restrictions on dealings with Iran's Central Bank - the only official channel for Iranians to transfer money abroad - and Swift, the body that handles global banking transactions, has cut Iran's banks out of its system.

Iran's officials have sought to step up domestic production of medicine. However it has been limited by subsidy reforms which have increased the cost of fuel and electricity, as well as by shortages of increasingly-expensive raw materials.