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VAT-exempted medicine imports to Iran affects domestic producers

Business Materials 24 September 2019 15:16 (UTC +04:00)

Tehran, Iran, Sept.24

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The import of medicines does not include the value added tax that works in favor of importers in Iran, but affects the producers, said the deputy head of economic health commission in Tehran Chamber of Commerce.

"Over the years, the value added tax was not imposed on import of medicines that was profitable for importers, but created loss for producers," said Haleh Hamedifar, Trend reports citing IRNA.

"However, it cannot be said that medicine importers are committing tax evasion, they merely use the law to their favor," she added.

"The importers only purchase the medicine from outside the country and sell it, in fact there is no other trade that need VAT payment. On the other side, the producers pay value added tax for all the services and purchased items, but do not receive any," she indicated.

"The law states that businessmen should pay series of value added taxes and receive it as well; then they need to announce the barter of items to National Tax Admission Organization. However, in practice, this does not include the imports medicine," she said.

"While Iranian National Tax Admission Organization states that value added tax should be added to the products, the price of medicines is determined by the government and they always keep the prices down," she added.

Recently, a member of Iranian parliament commented on the issue and raised the question about why the medicine importers do not pay value added tax.

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