Iran Economy NewsIRAN: Merchants continue to protest government's proposed tax hike

IRAN: Merchants continue to protest government’s proposed tax hike

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Los Angeles Times: All eyes in Iran are on the bazaar, the nation’s traditional marketplaces, where tensions have peaked over a proposed tax hike that has fused with other strains of discontent against the government of President Mahmoud Ahmadinejad.

The Los Angeles Times

Babylon & Beyond


July 11, 2010 |  9:55 am

All eyes in Iran are on the bazaar, the nation’s traditional marketplaces, where tensions have peaked over a proposed tax hike that has fused with other strains of discontent against the government of President Mahmoud Ahmadinejad.

Since Tuesday, strikes in Tehran’s old bazaar rage on as merchants still refuse to accept the government’s proposal for an increase on their income tax.

By some accounts, the bazaar protest is gathering momentum. In response to the growing demonstrations, increasing numbers of police are stationed not only around the bazaar but in various points throughout Tehran.

Authorities have also shut down the bazaar, declaring Sunday, ordinarily a bustling work day, an impromptu holiday because of the hot weather in an attempt to mask over the strike.

On Sunday, subways heading to the bazaar were relatively empty. Whole swaths of the market were shut down

“I am still continuing my strike,” said Ali, a cloth merchant. “I may keep shut on Monday too.”

He said his annual taxes were jumping from about $1,700 to $4,700 despite slow business.

News websites said authorities arrested the head of the union of fabric traders in Tehran’s old bazaar for allegedly speaking to merchants  through a loudspeaker to assemble in Sabzeh Maidan Square, the main gate of the old bazaar, against the tax hike.

Some Iranian youth joined the merchants in protest at Sabzeh Maidan. Eyewitnesses report that when a student attempted to record the scene, police beat him with a baton and arrested him, spiriting him away to an unknown location. Witnesses claim that plainclothes policemen and government security forces then launched tear gas bombs at protesters.

One opposition activist reported that by Thursday, hundreds of students and merchants had gathered in the shoemakers’ quarter of the old bazaar, chanting such slogans as, “Death to Ahmadinejad” and “Victory is God’s, and victory is near,” adding “Death to this deceptive government!”

Police immediately blocked all entrances to the shoemakers’ area.

Adding to the confusion is that the government keeps changing its tune.

After the first day of the strike, Deputy Trade Minister Mohammad Ali Zeyghami had announced that the government had surrendered its initial plan to raise taxes by 70% on the merchants.

In fact, he continued, the raise had always been pegged at just 30%. So the whole hullabaloo was was caused by “a mere mistake” in communication between merchants and the government and their understanding of the law itself.

Despite the meeting Saturday between the Tax Office and the National Council of Trade Unions, a resolution has yet to be reached. Iranian reports are claiming that the head of national tax affairs walked out of the meeting once it started heating up.

The parliament and the powerful, hardline Guardian Council approved the law to raise the income tax nearly two years ago. However, spates of strikes by merchants have dissuaded the government from enforcing it.

Some merchants continue to pay the taxes. A man who has been selling scarves in the bazaar for more than 40 years said he will comply with the law.

“I will pay my tax and I think those who are on strike are connected to the regime too,” he told Babylon & Beyond. “Nobody can dare to continue the strike unless he is supported by one faction of insiders. Those who are on strike were involved in the toppling of the former regime and now can afford to go on strike, but I do not dare, and I pay my taxes.”

In the sections of the bazaar still open, electricity brown-outs kept plunging the shops in darkness, even during daylight, and the merchants could be seen angrily fanning themselves with small hand-held fans, made in China.

— Becky Lee Katz in Beirut and Ramin Mostaghim in Tehran

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