Week in Brief 07.12.2018

Cigarette production in Iran has fallen by 16 percent within the first half of the Iranian year, says the Iranian Tobacco Producers and Importers Association (ITPIA).

Iranian cigarette producers import up to 100 percent of their tobacco and recent fluctuations in exchange rate has influenced their production as well.

“Recently prices of cigarettes have gone up very sharply”, explains Mohammadreza Tajdar, Head of ITPIA. “This is because of several taxes imposed on cigarettes which previously did not exist”.

According to the latest law passed by the Parliament, on one cigarette of local brands are 75 rials and for foreign brands manufactured in Iran are up to 250 rials for each cigarette. Taxes on each imported cigarette is 6000 rials. New taxes show an increase of 10% to 40%.

A cigarette in Iran costs from 750 rials for Iranian brands, up to 11,500 rials for imported cigarettes.

While production during the current year has dropped significantly, tobacco producers complain that the government wants to increase VAT taxes on their products as well.

“The government has also increased VAT taxes to 20% for local brands, from previously 15%”, continues Mr Tajdar. “For imported cigarettes, VAT is now 65%, up from 35%. Besides, VAT will increase by 5% every year”.

This rising trend will continue until VAT on local and imported brands reaches 85% and 125% respectively.

In the first six months of the Iranian current year, 1.96 million cartons of cigarettes were produced. Each carton contains 10,000 cigarettes.

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