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Iran postpones new sales tax

Oct. 9, 2008 at 12:07 PM

TEHRAN, Oct. 9 (UPI) -- Iran said it would postpone implementation of a 3 percent sales tax after merchants in several cities shuttered stores in protest.

Angry merchants kept stores closed for two days in the shopping bazaar in Esfahan. Shops also closed in Tehran, Mashad and Tabriz in a display of public indignation, The Washington Post reported Thursday.

In a state television interview Tuesday, Iranian President Mahmoud Ahmadinejad said the new tax was essential to economic reforms, which include ending government subsidies for flour, gasoline and electricity, the Post reported.

The reforms are meant reel in government spending and cut inflation, which is 29.4 percent in Iran, Iran's Central Bank said.

But, after a meeting between merchants and Iranian tax authorities Wednesday, it was agreed the tax would be suspended for 3-6 months.

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