Iran is to offer tax exemptions of up to 100 percent in a bid to entice foreign investors, the Tehran Times quoted the country’s deputy economy minister Behrouz Alishiri as saying.
The largest tax breaks are in the agriculture sector, with a 100 percent tax exemption set for an unlimited period of time.
Exemptions of up to 80 percent will be on offer in the industry and mining sector, as well as a 100 percent exclusion for 10 years in underdeveloped areas, the Islamic Republic of Iran Broadcasting (IRIB) cited Alishiri as saying on Saturday, the Tehran Times reported.
Tax exemptions in free trade zones will be extended for 20 years, Alishiri added.
The move is seen as part of a plan to boost foreign direct investment (FDI) into the country, which has been hit hard by economic sanctions imposed over Iran’s disputed nuclear program. Alishiri did not say how much investment the tax exemptions could bring into Iran.
Other plans in motion include the restructuring of the organization for foreign investments, implementing a unified window platform for investments and offering more incentives to investors.
Iran currently has the second largest economy in the Middle East and North Africa region and attracted a record high $5 billion in FDI in 2012, a 17 percent increase on the previous year, according to the UNCTAD World Investment report.
Figures for the last Iranian calendar year, which ended on March 20, suggest that FDI continues to grow. Interior Minister Mostafa Mohammad-Najjar said in March that Iran attracted $7 billion from abroad during the last Iranian year, Bloomberg reported.
Whilst Iran has continued to draw foreign interest, the impact of recent international sanctions against its nuclear program saw the economy contract in 2012, according to the International Monetary Fund (IMF).
“The medium term outlook for economic growth is negative due to the impact of stricter recent economic sanctions, which are expected to reduce revenues from oil exports and to impede corporate restructurings,” added the IMF overview.