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Majlis Passes Bill to Raise Cigarette Prices
Economy, Domestic Economy

Majlis Passes Bill to Raise Cigarette Prices

The parliament has ratified the bill to increase the retail prices of cigarettes in an open session on Tuesday. Based on the new law, the prices of imported brands will rise by 500 rials (about 1.4 cents at market exchange rates) for each cigarette. For joint production and domestically-produced brands, the increase will be 350 rials (about 1 cent) and 100 rials (0.3 cents) respectively, Mehr News Agency reported. According to the Health Ministry’s spokesman, Iraj Harirchi, the legislation aims to reduce tobacco consumption. However, Hossein Barkhordar, CEO of the Iranian Tobacco Company, claims that the move will fail to reduce smoking, as it did on previous occasions.  “The price hike will severely impact the domestic tobacco industry and give rise to smuggling,” he said. Echoing the ITC chairman’s remarks, Mohammad Reza Tajdar, the head of the Association of Producers, Importers and Exporters, said “an unreasonable growth in tax and duties levied on cigarettes will increase smuggling of the product from the current 30% to over 70%.” Last Iranian year (ended March 19, 2016), the country imported about $121 million worth of cigarettes from Turkey, South Korea, the UAE, Switzerland, the Russian Federation, Netherlands and Vietnam.  The figure accounts for legally imported cigarettes only and the bulk of cigarettes sold in the domestic market are smuggled. Iran has some 10 million smokers, with an additional 600,000 exposed to the detrimental effects of passive smoking.

 

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