Economy, Auto

Car Import Tariffs Need Reform

Car Import Tariffs Need ReformCar Import Tariffs Need Reform

Iran's Customs Administration has proposed that car import tariffs should be calculated based on engine size and vehicle value.  

According to the head of ICA's Tariff Evaluation Office, car import tariffs are currently calculated solely based on engine size, Fars News Agency reported.

Adbolreza Gholami added that ICA has proposed that for the import of passenger cars, the government should factor in both the engine size and the overall worth of the vehicle.

According to the official, the Cabinet has not announced a final ruling on the proposition yet, but the Ministry of Industries, Mining and Trade is open to the idea.

Gholami noted that import tariffs should logically differ for two cars that cost $8,000 and $50 million respectively, although both have 2-liter engines. Other factors that should be looked into are car models and country of production.

"The higher trade profit rates over the past few years have only created a shadow economy" he said, adding that to support local manufacturing units and industries, it is necessary to reduce import tariffs.

Shadow economy refers to illicit economic activity existing alongside the official economy, such as black market transactions and undeclared work.

"High tariffs only result in increasing amounts of smuggled goods entering the country," he warned.

On Monday, Mohammad Reza Modoudi, the head of Iran's Trade Promotion Organization, told Mehr News Agency that vehicle import tariffs of 55% have remained unchanged for the coming year and officially the import ban on vehicles with engines larger than 2.5 liters remains.