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Tariffs on Tires of Heavy-Duty Vehicles Slashed

Tariffs on Tires of Heavy-Duty Vehicles Slashed Tariffs on Tires of Heavy-Duty Vehicles Slashed

Following a steep decline in domestic tire production, the government was forced to decrease tariffs on imported tires to help address truckers’ needs and avoid serious disruptions in the key transportation sector.

After permission from the government, the Islamic Republic of Iran Customs Administration lowered tariffs on tires for heavy-duty vehicles from 26% to 5%, Asr-e Khodro reported.

Several local companies including Kavir Tire and Yazd Tire used to produce tires for trucks and cars in large volumes. Their production together with imports easily met  domestic demand. 

However, after US President Donald Trump reneged on Iran’s nuclear accord and imposed sanctions against Tehran, many foreign suppliers of raw material for tire manufacturing suspended their collaboration with Iranian firms.

With the shortage in raw materials tire production declined significantly causing shortages that compelled the government to take action. 

Although there is no credible data on the demand for heavy-duty tires in Iran, according to Mohammad Reza Bajestani, an official with the Ministry of Industries, local truckers annually need an estimated 350,000 tons of tires. 

To further ease imports, tires have been categorized as an “essential good” and are no longer subject to the 4% upfront payment for import duties.

Deputy Director of Road Maintenance and Transportation Organization, Daryush Amani says, “Tire importers are eligible for subsidized foreign currency with high priority.”

Amani said the customs clearance process for tires should be eased and imported tires in customs warehouses must be released as soon as possible.

>Online Sales 

In a move aimed at regulating the market, the head of Isfahan Provincial Department of Road Maintenance and Transportation, Mehdi Khezri said tires will be sold  via an online platform in the province.

Truckers can post requests for tires on tire.rmto.ir and receive their goods from their trade unions. 

The online service is able to check the applicants’ information, identify the fleet they are working for and the type of their vehicle to enable prioritized distribution.

In June and with much publicity the government increased import tariffs for heavy-duty tires from 20% to 26% with the declared aim of “promoting domestic production”.

At the time tire companies and industry insiders said  the measure was inadequate and that the customs duties should be significantly higher. However, that was then and this is now. What the government can do best, as is often the case, is limit the damage.

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