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In our newsletter, you will
find the latest news and comments on legal and
trade-related developments in various areas of Iranian
commercial and financial law and practice.
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Contents |
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Iran Announces Establishment of
Customs Union among Russia, Belarus and Kazakhstan
Iran and Qatar Sign Extradition
Agreements
Iranian
List of Specialized
Customhouses for Import of Goods
Black Tea Subject to
Standardization
Effectiveness of Double Tax
Avoidance Agreement between Iran and the Republic of
Azerbaijan
The Law of Utilization of
Facilities of the Foreign Exchange Reserve Account for
Rail and Public Transport in Cities
Import of Tobacco Products without
Health Warning and Holograms Prohibited
National Budget of 1389 (21 March
2010-20 March 2011) on Finance, Investment and Imports
Inclusion of the Name of the
Country of Manufacture a Must for Imported Goods
Foreign Investors Free to Use
their Names for Corporations in Iran
Refinance for Import of Certain
Finished Products Banned
The
Bill for Subsidy Targeting Ready for President’s
Implementation
Iranian Government Bans Purchase
of Certain Foreign Goods
Implementation of Increased Rice
Tariff Extended
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21 June 2010 |
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Iran Announces Establishment of Customs Union among
Russia, Belarus and Kazakhstan |
Nourlaw.com (21 June 2010) -- The Iran Chamber of
Commerce and Industries and Mines (ICCIM) has
forwarded a letter to Iranian Customs announcing the
establishment of the Russia-Belarus-Kazakhstan
Customs Union. Iranian Customs in its Circular
Letter number 95/55/25/108/83822 dated 23/04/1389
(14 July 2010) has notified all Iranian entities
engaged in international road transport, that the
newly formed customs union came into force as of 1
July 2010. The area of the said union covers the
entire territory of these countries and is
considered a single customs zone.
The TIR Carnet operations shall be implemented in
the union's territory and handle goods only at the
point of entry and the designated customhouses.
Exchange of data for settlement of carnets will be
undertaken and recorded electronically among customs
union members. Additionally the border between
Russia and Belarus shall effectively cease to exist
on 1 July 2010, and in the case of the border
between Russia and Kazakhstan it will gradually
disappear starting from 1 July 2010.
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2 June 2010 |
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Iran and Qatar Sign Extradition Agreements |
Nourlaw.com (2 June 2010) -- The Iranian Official
Gazette published two agreements today that were
concluded between the Islamic Republic of Iran and
the State of Qatar. The measures are for extraditing
perpetrators of crimes and the exchange of nationals
serving sentences in either state. In the agreements
ratified by the Iranian parliament on 16/10/1388 (06
January 2010), each of the signatories is committed
to deliver to the other party persons sought for
prosecution or convicts sought for punishment and
the transfer of prisoners of the respective
nationalities to the requesting party. The
extradition and transfer will be carried out in
compliance with the conditions set out in the
agreements.
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12 May 2010 |
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Iranian List of Specialized Customhouses for Import of
Goods |
Nourlaw.com (12 May 2010) -- Directorate
General of Transit Supervision in its circular
letter No. 41/55/73/102/33460 dated 19/2/89 (9 May
2010) has published the list prepared by the Import
Bureau regarding the specific customhouse for the
import of different kinds of goods. They are:
1- Medical Equipment: Customhouses of (1) Mehrabad
Airport (2) Imam Khomeini Airport (3) Shahid Rajaee
Bandar Abbas (4) Imam Khomeini Port (5) Oroumieh (6)
Sahlan. In addition, Shariar customhouse is allowed
to clear the said goods until the permanent
stationing of the representative of the Ministry of
Health in the designated customhouses is
accomplished.
2- Cigarette and Tobacco Products: Customhouses of
Shahid Rajaee Bandar Abbas Port (2) West Tehran (3)
Imam Khomeini Airport (4) Jolfa (5) Khorramshahr (6)
Chabahar (7) Qeshm (8) Bushehr.
3- Second-hand Road Construction Machinery: (1)
Shahid Rajaee (2) Khorramshar (3) Bushehr (4)
Oroumieh (5) West Tehran (6) South Tehran (7)
Esfahan.
4- Vehicles: (1) Shahid Rajaee Bandar Abbas (2)
Shaid Bahonar (3) West Tehran (4) Nowshahr (5)
Bandar Anzali (6) South Tehran (7) Bushehr (8)Imam
Khomeini Port (9) Chabahar (10 ) Shahriar (11)
Oroumieh (12) Sahlan (13) Mashhad (14) Esfahan (15)
Khorramshahr (16) Salafchgan (17) Genaveh (18)
Zanjan (19) Bandar Lengeh (20) Qazvin (21) Shiraz.
5- The Customhouses of West Tehran, Bandar Anzali,
Shiraz, Esfahan, Mehrabad, Shahid Rajaee Bandar
Abbas, Shahriar, Imam Khomeini Airport, shall be
allocated to the Ministry of Defense.
6- Mobile Phone Sets: (1) Mehrabad sections 1 and 2
(2) Imam Khomeini Airport (3) Payam Airport (4)
Esfahan (5) Shiraz (6) West Tehran and Shahid
Bahonar Customhouses are authorized to clear only
the accessories of mobile phones.
7- Customhouses Allocated to the Embassies: Mehrabad,
South Tehran, Mashhad, Shiraz, Tabriz, Esfahan,
Bushehr.
8- Gold and Jewels: (1) Mehrabad (2) Esfahan (3)
Tabriz (4) Mashhad.
9- Chinaware: (1) Bushehr (2) Khorramshahr (3)
Chabahar (4) Qeshm (5) Shahriar.
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12 May 2010 |
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Black
Tea Subject to Standardization |
Nourlaw.com (12 May 2010) -- The First Deputy
of the President has notified the decree No.
40831/23022 dated 4/2/89 (24 April 2010) to
ministries of commerce, industries & mines, and
agriculture and the standard organization for
implementation. According to the decree, as from the
beginning of the Iranian year 1389 (21 March 2010),
the standards outlined for black tea in the
notification shall be obligatory.
In light of the above, producers, retailers and
importers shall be subject to the new rules.
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5 May 2010 |
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Effectiveness
of Double Tax Avoidance Agreement between Iran and
the Republic of Azerbaijan
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Nourlaw.com (5 May 2010) -- Technical and
Legal Deputy of the Tax Affairs Organization in
circular letter No.210/1438 Dated 25/01/1389 (14
April 2010) has declared that with respect to the
Double Tax Avoidance and Barring Tax Evasion
Agreement and its related Protocol concluded on
26.08.1388 (17 November 2009) between the Islamic
Republic of Iran and the Republic of Azerbaijan, the
stipulations of the Agreement shall be applicable to
the revenues and capital accrued in Iran as from the
first day of the month Farvardin 1389 (21/3/2010)
and as from first of January 2011 in Azerbaijan.
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5 May 2010 |
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The
Law of Utilization of Facilities of the Foreign
Exchange Reserve Account for Rail and Public
Transport in Cities |
Nourlaw.com (5 May 2010) -- The law of
Utilization of the Facilities of the Foreign
Exchange Reserve Account for Rail and Public
Transport in Cities, passed on 22/10/1388 (
11January2010 ) by the Parliament and ratified on
15/11/1388 ( 4 February 2010 ) by the Expediency
Council, was published on 11/02/1389 (1 May 2010) in
the Official Gazette and shall be effective 15 days
thereafter.
According to this single article law “In line with
the Law of Protection of the City and Suburban Rail
Transport Systems, approved in 1385 ( 2006 ) and the
Law of Expansion of Public Transport and Fuel
Consumption Management approved in 1386 ( 2007 ) and
for the purpose of the Subsidy Targeting Bill, the
government is obliged to allocate one billion USD
(1,000,000,000) for securing the equipment and
construction of the Tehran and Suburban Rail Lines,
USD seven hundred thousand (700,000,000) for
securing the equipment and construction of city rail
lines of other cities having approved rail plans and
USD three hundred thousand (300,000,000) for
implementation of the transport and traffic master
plans of other cities until the end of the year 1389
(21/March 2010 – 20 March 2011) out of the Foreign
Exchange Reserve Account or under any other name in
the form of facilities and with due consideration of
the law on Maximum Use of Iranian Technical,
Engineering, Manufacturing, Industrial and Executive
Expertise and Capability for Implementation of
Projects and Provision of Facilities Required for
Export of Services approved on 2 March 1997, to the
respective municipalities. The said facilities are
recognized as the 50% share of the government and a
guarantee of 100% repayment of the same shall be
borne by the government. The Ministry of Economic
Affairs and Finance is obliged to put the aforesaid
resources at the disposal of the related
municipalities in the year 1388 ( 2009 ) or the year
1389 ( 2010 )”.
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21 April 2010 |
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Import of Tobacco Products without Health Warning
and Holograms Prohibited |
Nourlaw.com (21 April 2010) -- Ministry of Commerce on the basis of the
Decree No. 610072 dated 25/12/1388 (16 March 2010)
of the Ministry of Health and Medical Education, has
declared that as from the year 1389 (21 March
2010-20 March 2011), the sale and import of tobacco
products without the health warning and hologram of
the tobacco company shall be prohibited.
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14 April 2010 |
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National Budget of 1389 (21 March 2010-20 March 2011) on
Finance, Investment and Imports |
Nourlaw.com (14 April 2010) --The Iranian National
Budget for 1389 (21 March 2010-20 March 2011)
contains specific points related to international
trade. Excerpts:
1- Remaining allocations of approved buy-back
facilities and foreign financial facilities subject
to the Law of Utilization of Foreign Financial
Resources passed on 6/7/1384 (28 September 2005) and
the commitments of the Foreign Exchange Reserve
Account mentioned in the budget laws of past years
shall remain in force in the year 1389 (Part A of
Clause 3 of the Law).
2- For securing the foreign exchange funds needed in
its ongoing investment projects, the Oil Ministry is
allowed to issue, after approval of the Central Bank
of the Islamic Republic of Iran (CBI), and through
its related affiliate companies (in the areas of
oil, gas, petrochemical, refining and distribution)
Sukuk Islamic bonds and or foreign exchange
participation papers (bonds) on the international
financial markets respectively up to five billion
euros (5,000,000,000 EUR) for the national Iranian
Oil Company and up to one billion euros
(1,000,000,000 EUR) for each of the two companies
engaged in gas and refining and two billion euros
(2,000,000,000 EUR) for the Petrochemical Company.
The said companies shall be responsible for
re-payment and guaranteeing the principal sums and
interest of such papers (Part C of Clause 3).
3- For the purpose of investment in profitable
projects having technical, economic and
environmental justification, as well as for passive
defense, Industrial Development and Renovation
Organization of Iran (IDRO), Iranian Mines and
Mining Industries Development and Renovation
Organization (IMIDRO), the industries related to the
Ministry of Defense and the Armed Forces Logistics
and the transport industry are allowed to issue,
after approval of the Central Bank of the Islamic
Republic of Iran (CBI), up to two billion euros
(2,000,000,000 EUR) in the form of Sukuk Islamic
bonds and or foreign exchange participation papers
(bonds) on the international financial markets. The
said companies shall be responsible for re-payment
and guaranteeing the principal sums and interest on
such papers (Part D of Clause 3).
4- In implementation of Part 3 of Article 28 of the
Law of General Policies of Principle 44 of the
Constitution Law and for the purpose of opening a
credit line for increasing the share of foreign
exchange facilities of non-governmental sectors, the
Central Bank of the Islamic Republic of Iran is
bound to deposit seven hundred million dollars
(700,000,000) from its own foreign exchange sources
in the banks of Industry and Mines and Agriculture
in foreign currency and rial forms at most by the
end of the month Khordad 1389 (21 June 2010) for
payment to the production units and industrial and
mining projects (Part L of Clause 8).
5- Clause 15 of the law deals with importation. The
import of all manner of agricultural products which
act as substitutes for domestic products is allowed
with the effective tariff rates three times higher
than the past year. Should the shortage in domestic
agricultural products be removed, imports will be
allowed with the effective tariff rates two times
more than the past year. In the event that the
domestic production of agricultural goods is
sufficient for nationwide consumption, the import of
similar goods shall be permitted with the effective
tariff rates four times more than the past year.
Clause 15 notes that if the increase in tariffs
results in an unreasonable increase in prices, the
tariff shall be adjusted. Clause 15 also notes that
the import tariffs should be adjusted so that
smuggling of goods is reduced. In this respect, the
ban on import of cigarettes shall be lifted for
compensating the shortage of cigarettes on the
market. For creating a competitive market and
upgrading the quality of domestically-manufactured
cars, the import tariff for such vehicles shall be
reduced to 70%.
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7 April 2010 |
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Inclusion
of the Name of the Country of Manufacture a Must for
Imported Goods |
Nourlaw.com (7 April 2010) -- Iranian Customs in
Decree Number 73/73/847/113/865 dated 9/1/1389 (29
March 2010) has declared that for the accurate
implementation of Part 12 of Article 40 of the
Customs Affairs Law, as from 1/3/89 (22 May 2010)
inclusion of the name of the country of manufacture
on the goods to be supplied directly to the consumer
market shall be obligatory.
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2 February 2010 |
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Foreign Investors Free to Use their Names for
Corporations in Iran |
Nourlaw.com (2 February 2010) -- In a shift intended
to attract more foreign investment, the Iranian
government has softened its stance with respect to
restrictions imposed on using foreign names for
corporations formed by foreigners in Iran.
According to the Law Banning Usage of Alien Names,
Titles and Phrases approved on 4 December 1996
restrictions had been foreseen for those wanting to
use foreign names and wordings in commercial and
production activities.
Now, the Iranian Council of Ministers has decreed in
its decision No.H 42200T/213296 dated 29/10/1388 (19
January 2010) that: ”Firms producing goods under
special trade names in other countries, are allowed
when investing in Iran, to use the name of the
foreign company and the said special trade name
(brand) when they register the company making the
investment and offer the goods produced in Iran with
observation of other related laws and regulations,
and they shall have neither limitations nor
differences with similar domestic cases in promoting
such goods”.
The said decree shall be used as the Note of the
By-law of the Law Banning Usage of Alien Names,
Titles and Phrases.
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27 January 2010 |
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Refinance for Import of Certain Finished Products Banned |
Nourlaw.com (27 January 2010) -- In yet another
measure aimed at the protection of domestic
manufacturing and exerting greater control over
foreign exchange resources, the Iranian government
by virtue of Decree Number K4385T/207903 dated
12/10/1388 (2 January 2010) has banned the import of
certain foreign goods through refinance facilities.
The goods affected are finished foreign products
which are also manufactured in Iran.
Iranian commercial banks have been involved in
payment of short term foreign exchange facilities in
the form of refinance credit lines utilizing the
resources of their foreign branches and foreign
banks. In this particular method of refinance, the
foreign seller receives the price of the goods by
submitting the related documents to the respective
bank and the Iranian buyer pays the price in
instalments to the bank.
According to Bank Saderat Iran, since the profit
rate of this facility for the consumer is lower than
that of Iranian Rial facilities, it can be of
significant help to importers in reducing the cost
price of goods while assisting manufacturers in the
import of raw materials, spare parts and machinery
for production lines. As well as commercial
importers for import and purchase of consuming
goods, are the users of refinance.
The ceiling levels for utilization of refinance
credit lines facilities by real and legal persons
are advised by the Central Bank of the Islamic
Republic of Iran.
The maximum period of utilization of short term
facilities is one year after negotiation of the
relevant documents. At present, the minimum amount
of the LCs issued for refinance credit lines is USD
100,000 or its equivalent in other currencies.
At least 10% of the Rial equivalent of the principal
and interest of the refinance LC is obtained from
the applicant when the LC is opened. The cost of the
refinance facility fee is 1.25% - 2% above the
International LIBOR rate, depending on the time
limit and is to be paid by the applicant at the time
of repayment of the amount of the negotiated
documents.
Other fees related to opening the LC, the
negotiations involved plus management fees are paid
by the applicant in conformity with the contract
between the bank and the financer, based on current
regulations and considerations related to credit
risk and provision of services.
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20 January 2010 |
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The
Bill for Subsidy Targeting Ready for President’s
Implementation |
Nourlaw.com (20 January 2010) --
The
controversial government bill for subsidy targeting
previously sent to the legislature for approval, was
finally sanctioned on 15 Dey 1388 (5 January 2010).
After a series of modifications it was notified to
President Mahmoud Ahmadinejad for implementation.
The bill aims at decreasing and ultimately
eliminating the huge amount of subsidies paid
nationwide. The highlights of the legislation are:
According to Article 1 of the Bill, the government
shall be obliged to gradually rectify the price of
energy carriers (fuel) until the end of the m Fifth
Five Year Economic, Social and Cultural Development
Plan which has been recently submitted by the
government to the parliament for debate and
approval.
The said article stipulates that the domestic sale
price of petrol, gasoil, mazut, kerosene, LPG and
other oil derivatives, with due consideration given
to the quality of the carriers and the costs borne
(including transport, distribution and legal levies)
shall incrementally change until it would not be
less than 90% of the Persian Gulf fob price of the
product. The article adds that the average domestic
price of natural gas must be graduated so that by
the end of the Fifth Plan it is equal to at least
75% of the export price of natural gas after
deduction of transfer costs, taxes and levies.
The article adds that for promoting investment, the
average price of the natural gas feed of industrial,
refinery and petrochemical units shall be at most
65% of the export basket price of the origin of
Persian Gulf gas (without the transfer cost) for a
period of 10 years after approval of this law. In
another part of the article it is stated that the
average domestic sale price of electricity should be
determined so that by the end of the Fifth Plan it
is equal to its actual cost price. Note One of the
article states that with respect to the price of
electricity and natural gas, the government is
authorized to implement preferential prices taking
into consideration the geographic regions, type,
amount and time of consumption.
By virtue of Article 3 of the Bill, the average
water price for different consumption levels shall
be determined, with due consideration given to the
quality and manner of exploitation in the country
and shall be so graduated that by the end of the
Fifth Plan it equals the real cost price. As stated
in Note 2 of the article, setting preferential and
scheduled prices for different types of water
consumption according to geographical regions, type
and quantity of consumption shall be permitted.
In accordance with Article 4, the government is
obliged to implement the subsidies targeted with
respect to wheat, rice, edible oil, milk, sugar,
postal services, air and rail (passenger) services
in a regular manner until the end of the Fifth Plan.
Article 5 binds the government to provide flour and
bread subsidies to consumers who apply for them in a
convenient fashion at the amount foreseen in the
annual budget bills.
Article 7 permits the government to spend 50% of the
net proceeds accruing from the implementation of the
Law in the form of a cash and non–cash subsidy
payable to the head of all families while taking
into account the ceiling of the earnings of the
family, expansion and funding social security
schemes, medical services, improving the health of
the society, and providing medical treatment for the
chronically ill, providing assistance for housing
costs, strengthening the structure of existing
houses, improving employment, social aid etc.
As foreseen in Article 8 of the law, the government
is bound to expend 30% of the net proceeds accruing
from the implementation of the law. This shall be in
the form of contributions, subsidies for payment of
interest on financial facilities and loans for
optimization of energy consumption in industrial,
services and housing units and encouraging
economization on consumption. It shall also include
improvement of the technological structure of
production units for increasing optimized use of
power and water and compensation of a part of the
losses sustained by companies providing water and
sewage disposal, electricity, natural gas and oil
products. Municipalities and townships accruing
losses through implementation of the bill shall be
compensated as well. Expansion and improvement of
public transport, protection of the producers in the
agriculture and industry sectors, protection of
industrial bread, protection of expansion of non-oil
exports, development of electronic communication
services for reduction of unnecessary trips are also
foreseen.
As stipulated in Article 11, the cash and non-cash
assistance allowed for in this bill shall be exempt
from payment of statutory taxes, and according to
Article 15, for implementation of the bill an entity
shall be established as a duly authorized
governmental company under the name Targeting
Subsidies Organization.
Article 16 permits the government as from the next
Iranian year of 1389 (21 March 2010-20 March 2011)
to increase the salary tax exemption of workers and
employees, foreseen in Article 84 of the Direct
Taxation Act, to not more than double within five
years, in addition to the yearly increase of the
exemption.
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13 January 2010 |
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Iranian Government Bans Purchase of Certain Foreign
Goods |
Nourlaw.com (13 January 2010) -- In a new measure
intended to protect domestic products, the Iranian
Government by virtue of decree Number K43680
T/193567, dated 1/10/1388 (22 December 2009) has
prohibited the purchase of a significant list of
foreign goods by executive government agencies.
The catalogue of proscribed goods includes 121
items, among them solar water heaters, elevators,
conference microphones, iphones, edible phosphoric
acid, blank cds and dvds, buses, minibuses, vans,
trucks and bicycles. Also listed are textiles,
shoes, safes, refrigerators, washing machines,
electronic calculators, gas, water and electricity
meters, pumps for hydro air coolers, sugar, soap,
audio and video door opening devices, powdered milk
for infants, computers LCD monitors. fungicides,
newsprint paper, packaging industries, lamps,
factories for producing livestock feed and poultry
food, vacuum cleaners, cosmetics and hygienic
products.
According to the decree, a work group consisting of
the ministries of industries and mines, commerce,
oil, defense, health, agriculture and National Code
Center is preparing an additional list of prohibited
import goods.
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13 January 2010 |
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Implementation of Increased Rice Tariff Extended |
Nourlaw.com (13 January 2010) --
Iranian Customs in
its circular letter number
287/73/3103/103/237571/237906 dated 21 Dey 1388 has
declared that by virtue of the Council of Ministers
ruling on the increased tariff of imported rice, the
higher duty shall be extended to the end of the
current Iranian year (19 March 2010). Earlier, in a
measure to quell the growing discontent of domestic
rice producers, the government upped the import
tariff on rice in September 2009.
According to the declaration of the Ministry of
Commerce as of 22 Shahrivar 1388 (13 September 2009)
to 1 Dey 1388 (22 December 2009), the Commercial
Benefit Tax (CBT) was increased from 21% to 41% of
the CIF (cost insurance freight) value of rice
imported under the Harmonised customs codes
10061000, 10062000, and 10063000.
In light of the higher rice tariff, importers must
also pay 4% for entry dues and 3% for VAT which when
added to the increased CBT, would be nearly 50% of
the CIF value of the imported rice.
In the last few months, reports have circulated
alleging the contamination of imported rice,
especially from India and petitions were made by
local farmers in support for consumption of
domestically-produced rice.
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