Worries about impact of tax on those who travel for pilgrimage, education, and business

In a sign of the fragility of Iran’s economic recovery, the Rouhani Government’s budget has sharply raised the cost of leaving the country. The measure is being pursued to find revenues — and possibly to ensure Iranian spending at home — as the Government reduces investment in infrastructure by more than 16%.

Frud Bezhan reports for Radio Free Europe/Radio Liberty, with a contribution from EA:

The price for Iranians of heading abroad could triple if the government’s new budget proposal is approved.

Under the budget plan submitted by President Hassan Rohani on December 10, so-called departure taxes would skyrocket to around $60 for a single trip outside the country, compared with the current fee of $20. Subsequent trips within a 12-month period would incur even higher fees.

The proposed tax hike has prompted outrage among many Iranians, who are suffering from the effects of an ailing economy, soaring prices for goods, and slashes to government subsidies.

Tehran hopes the new tax will keep some people at home and boost an economy battered by low oil prices and years of crippling international sanctions imposed over Iran’s contentious nuclear program.

Government officials say some revenues from the tax hike would go toward developing tourism infrastructure and preserving cultural heritage sites.

“Because it hits those who frequently travel abroad, it is probably a ‘progressive’ tax in that it will affect the better-off, rather than a regressive tax targeting the poor,” says Scott Lucas, an Iran specialist at the University of Birmingham in Britain and editor of the EA WorldView website. “Whether or not it is the intention, it will also limit Iranian expenditure abroad and thus possibly increase spending at home.”

Fatemeh Zolqadr, a member of the parliamentary Cultural Commission, said the “logic that those who travel abroad are rich and must pay more for their trips is faulty”. She said the new tax would heap financial pressure on middle-class travelers who go abroad for the hajj pilgrimage, education, and business.

Gholamali Jafarzadeh Abadi, a member of the Parliamentary Plan, Budget, and Audit Committee, said the money the government would raise through the new tax would be insignificant and the move would harm “students studying abroad and patients forced to travel overseas for medical treatment”.

Abadi added that around 9 million Iranians traveled abroad in 2016.

Ali Asghar Munesan, Vice President of Iran’s Cultural Heritage, Handicrafts, and Tourism Organization, said the tax rise is intended to boost domestic tourism but suggested it would not help.

“With the view that inexpensive travel must be made part of the lives of all Iranians, I believe that implementation of any decision must correspond to the economic situation of the people,” he said.

Somayeh Tohidlou, a well-known Iranian blogger and political activist, defended the planned tax and said it is “necessary to increase taxes on the [upper] class” who “spend that much easily in foreign countries.”

Iranians have taken to social media to vent their anger at the proposed new tax.

Hemad Nazari, a Twitter user, posted on December 10: “This tax will seriously impact the foreign travel of the lower-middle and poorer classes. A family of four will have to pay $267.”

“Nothing like the departure tax has ever made me so disappointed with my own decision to vote for Rohani,” read another post on Twitter.

Rouhani campaigned for the Presidency in 2013 and won reelection last year on pledges that he would improve the economy and chip away at obstacles to improved relations with the outside world, including the West.

Commenting on the departure tax, Iranian social-media users have compared the government in Tehran to the Sheriff of Nottingham, the villainous official with little regard for the poor in the legend of Robin Hood.

This widely shared tweet includes an imaginary dialogue between a traveler and the sheriff:

Q: Are you traveling abroad?

A: Yes, if you allow me.

Q: What do I get?