Economy, Business And Markets

Tariffs for Assessment of Iran’s Tourism Facilities Reduced

Tariffs for Assessment of Iran’s Tourism Facilities ReducedTariffs for Assessment of Iran’s Tourism Facilities Reduced

To streamline regulations and cut operating costs of tourism facilities, a government directive approved last year has gone into effect, reducing tariffs for assessment of tourism facilities.

“The new regulation is in line with our goal of supporting the private sector and being fair to managers of tourism amenities,” Morteza Rahmani Movahed, tourism deputy at Iran’s Cultural Heritage, Handicrafts and Tourism Organization, was quoted as saying by Mehr News Agency.

Establishments that offer services to tourists, such as hotels, are assessed by ICHHTO before receiving an operating permit.

Besides being long and time consuming, assessment procedures normally cost upward of 400 million rials (over $11,000 at market exchange rate).

Under the new regulation, the fee for the initial assessment of an establishment (including its service quality and amenities) has dropped down to a maximum of 80 million rials (over $2,200)—less than a fifth of the previous rate.

Furthermore, the cost of subsequent assessments to renew operating permits cannot exceed 20 million rials ($555).

Additionally, the permits are now valid for five years, up from three.

High operating costs and crippling bureaucracy have long been blamed by insiders as major obstacles deterring investors from financing key tourism projects.

Iran’s stated goal is to attract 20 million tourists a year by 2025, nearly four times the current 5.2 million annual visitors. However, underdeveloped infrastructure, especially a lack of quality hotels, threatens to unravel Iran’s plans.

To help draw foreign investment and increase the number of four- and five-star hotels, Iran announced last month that it is offering tax holidays of between five and 13 years to hoteliers.

About 170 projects to build high quality hotels are already underway and the government hopes to see 300 new hotels in the next five years.

Tourism, a key growth sector for a country that seeks to move away from oil, made up just 7.6% of Iran’s GDP last year. The figure is expected to rise to about 9% in 2016.

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