Economy, Business And Markets

Tax Exemption for Petrochemical Feedstock

Tax Exemption for Petrochemical Feedstock
Tax Exemption for Petrochemical Feedstock

The petrochemical feedstock for production units is exempt from 5 percent duty which will in turn be used for renovating pipelines.  Iran’s deputy oil minister for planning and supervision on hydrocarbon resources, Mansour Moazzami notified the managing directors of the National Iranian Oil Refining and Distribution Company and the National Petrochemical Company (NPC) of the new procedure, SENA reported.

The feedstock is being offered at the Iran Mercantile Exchange and can also be supplied directly to the petrochemical production units including oil and bitumen manufacturers.

Following the announcement, the petrochemical feedstock will be offered at the IME based on a five percent reduction on its international price.

The Oil Ministry will also initiate plans to renovate and expand the crude oil, condensate and petroleum products’ pipelines network. It said it would provide required funds to develop the refineries and chain supply infrastructures, storage and distribution – which are part of the government’s responsibility,  and shall be completed by the ministry, according to the article ‘K’ of the clause 2 of the country’s budget law in 1393, which started on March 21, 2014.

According to clause 2 of the budget, the funding for these projects will be paid for by the 5 percent increase in duty on all petroleum products, which will subsequently be transferred to the treasury totaling 15 trillion rials.

This revenue will not be considered as part of the companies’ income and is 100 percent tax exempt. It will be used in the maintenance of the country’s petrochemical infrastructure.