TEHRAN (Iran News) – Coordination Manager of financial bodies of Secretariat of the Supreme Council of Free and Special Economic Zones says Majlis decision for levying tax on the value-added in the free zones is against the law and the nature of these zones, and it will kill the interest for investment in those zones and will pave the ground for a flight of capitals from the zones to the neighboring countries because all the neighboring countries grant more incentives and tax exemption for investments.

Reacting to the Majlis approval regarding tax exemption in the free zones, Elham Sakhaee said that the main advantage of investment in the free and special economic zones to the other areas is its tax exemption and the tax exemption in the zones is according to the law of the administration of the free industrial-trade zones which has been approved in 1994 and it has been levied in the special economic zones according to the law of launching and administering special economic zones which have been approved in 2006.

Sakhaee noted that Majlis’s decision is in contradiction to the laws regarding the administration of free zones. She noted that tax exemption on value-added is one of the incentives for investment and production in the free zones, adding that sudden elimination of this advantage will push the economic activists in these areas into new processes that are against the policy of easing the process of the business in those areas, and it will encourage producers to provide their required raw materials from other countries and this is also against the supportive policies from exports and hindering imports of foreign goods.

She added, by the way, it will increase the cost of production and kill the interest of investors in investing in those areas.

Sakhaee also claimed that this decision will also affect the tourism industry in those areas while according to most countries Iran can make most of its tourism industry. She further said most of the neighboring countries with fewer privileges comparing to Iran do their best for boosting their tourism industry by offering incentives to the investors in this money-making industry.