Traders hail Iran’s decision to remove tax on foreign currency import

Traders say Iran’s decision to remove a tax on importing foreign currency was necessary to offset the sanctions.

Currency traders in Iran have welcomed the government’s decision to remove a tax on importing foreign currency into the country, saying the move would help neutralize the effects of US sanctions on Iran’s economy.

“This new ratification is very smart because many companies and individuals are currently looking to transfer currency into the country to finance their imports,” Ahmad Lavasani, who heads the Iranian Money Exchangers Association, said on Tuesday.

The comments came a week after Iran’s National Tax Authority announced that any import of foreign currency into the country, including cash or bank transactions, will be duty free from April 16.

A decree issued to provincial tax offices stipulates that companies or individuals will be allowed to import any amount of foreign currency money into Iran without the need to indicate the origin of the money.

Iranian exporters and importers had criticized the old law which required them to provide documents showing where they got the money.

They also had to pay heavy taxes depending on the amount of money they imported.

Lavasani said providing money laundering documents and paying taxes on imported currency was a double burden for Iranian businesses at a time when they faced restrictions in other countries due to US sanctions.

He said the new law would be a major help for companies seeking to transfer their export earnings to Iran for use in domestic projects or to finance imports of goods and services.

US sanctions imposed since 2019 have effectively blocked Iran’s entire banking system from accessing international banking and financial services.