Green Tax on Gov't Agenda

The Council of Ministers voted in favor of adding an environmental levy to a bill on value-added tax last week, putting the government's weight behind an initiative by the Department of Environment to heavily tax polluting industries.

The green or eco tax is targeted at industries that produce high levels of pollution. Its amount is determined in proportion to the intensity, duration and type of emissions as well as the location of the facility, Khabaronline.ir reported.

The tax could be anywhere between 0.5% and 1.5% of the unit's revenue.

The pollution tax was put on the government's agenda after around two years of studies by DOE, Ministry of Economic Affairs and Finance and the government's Economic Commission.

"Green tax is one of the parameters of green economy along with green banking, environmental assessment in projects and other environmental policies, all of which have made good progress during the present administration's term (since the summer of 2013)," said DOE chief, Massoumeh Ebtekar.

The decision is expected to help maintain a clean environment and motivate industries to raise their standards and take measures to reduce their emissions levels.

"Green tax is a way of compensating for the release of pollutants into nature, as it can generate income for the health and environment sectors," she said.  All large industrial projects are legally bound to pay environmental taxes, while the green tax bill aims to impose levies on medium-scale projects.

Ebtekar, who doubles as vice president, had earlier warned against viewing the bill as a “stopgap measure” and urged businesses to cooperate, since the levies can and will lead to a clean environment and substantially reduce healthcare costs.    

The phrase “green taxes” is commonly used to refer to a package of government measures intended to encourage expansion of low-carbon power, subsidize home insulation and tackle fuel poverty. The measures are paid for via levies on energy bills.