Economy, Business And Markets

Export Slump: Problems and Solutions

Export Slump: Problems and Solutions
Export Slump: Problems and Solutions

High interest rates on loans and the inability of exporters in buying foreign currency at the official exchange rate, which is considerably lower than the market rate, were cited as primary reasons behind the slump in exports in a meeting between Valiollah Afkhamirad, the Head of the Trade Promotion Organization of Iran (TPO), and exemplary exporters.

The meeting was held with the aim of reviewing the main obstacles faced by exporters as well as promoting non-oil exports by increasing the added value of other industries.

After voicing their problems, exporters urged for more support from the TPO, and asked the government to reduce interest rates for the loans they receive, IRNA reported.  

The exporters suggested the government provide support to at least 50 to 100 of the top exporting companies so that the problems with which they are faced could be overcome through cooperation.

The policies of the Iranian National Tax Administration (INTA) were blamed as exporters stressed that as long as the INTA does not realign its discordant polices or pay value added taxes (VAT) to manufacturing and exporting sectors, exports will continue to decline.

Afkhamirad clarified that the economy minister has vowed that exporters shall receive VAT in a course of a month. He further said that certifying documents must be submitted if exporters have purchased goods inside the country and paid the VAT. On the other hand, if an exporter has imported raw materials first and afterwards exported the manufactured goods, “VATs for such cases have doubtlessly been paid and the INTA is required to pay such exporters within a month.”

Exporters also said that domestic contractors on construction and manufacturing projects are similarly not receiving VAT, and are thus unable to compete with foreign contractors. It was suggested that the government offer solutions which would enable domestic contractors to compete.

Afkhamirad stressed that the issues raised will be technically reviewed and urged exporters to submit effective suggestions or opinions to the TPO.