Iran’s Central Bank has issued a circular to the banks’ network regarding the execution of a newly enacted law with the purpose of facilitation of repayment of the debts to the banks and credit institutions.
According to this law, to support domestic production and to facilitate the clearing of debts of producers, they have an option to apply to their banks for the repayments of their debts under new conditions, if they have not paid all or part of their debts by the due date with the condition that repay their debts in cash. Accordingly, the same contract shall be the basis for calculating the debt under this Act and the amount that the debtors must pay to the bank or credit institutions shall be the principal debt amount plus the simple and non- compounded interest rate. Also, all their fines and penalties shall be discarded. We are expecting the issuance of the executive circular within the next two weeks. Ultimately those who want to use this law are required to submit their applications until March 2020.
According to the current tax regulation by the government of Iran (Direct Tax Act) Residential units located in cities -which are identified as “Unoccupied” based on the information derived from the National Database of Real Estates and Housing of the Direct Act- shall be subject to the rental income tax.
Recently the government has taken steps for the activation of the National Database and this move shows that the government is eager to receive this kind of tax from unoccupied houses and apartments.Calculation of such tax is based on following formula:
– For the second year: an amount equivalent to one-half of the due tax of the Properties Schedule;
– For the third year: an amount equal to the due tax of the Properties Schedule; and
– For the fourth year onward: an amount equivalent to 1.5 times the due tax of the Properties Schedule.
The Iranian government is planning on launching this National Database by the end of the current Iranian calendar year (March 19, 2020). It is estimated that there are more than 2.6 million empty homes, a figure which is three times more than the global average.
During two days meeting in Dec 2019, a memorandum of understanding (MOU) on economic, trade, scientific, and cultural cooperation between Iran and Kyrgyzstan was signed by road ministers of two countries.
One of the significant articles of this MOU is the capacity of cooperation between Iran and Eurasia union and is to highlight the grounds of promotion of regional interactions. Also, both sides have agreed to use the potential of Anzali Free Zone to create a transportation corridor to the Persian Gulf markets and Turkey. Anzali Free Trade Zone is well known as the economic hub of Iran in the southern part of the Caspian Sea and it is located in Gilan province.
The assistance of the governments for preparing the ground in engineering services in the field of export as well as establishing a joint trade council involving Iran and Kyrgyzstan free zones and holding industrial tours for the two countries’ investment to get familiarized with free zones are among the other clauses of the MOU. Moreover, facilitating the issuance of visas, in particular for people in business, holding international exhibitions, and establishing direct flights between the two countries were among the areas agreed at the meeting of two countries.
In late July, the government of Iran approved cryptocurrency mining as an industrial activity and announced that cryptocurrency miners should acquire necessary licenses from Industry, Mining, and Trade Ministry. Recently, Iran government announced a new electricity tariff for cryptocurrency mining operations. According to the new guideline, mining digital currency is banned during peak hours, which usually extends over 300 hours in the four months of high electricity consumption across Iran mostly due to the warm weather.
The rates of electricity for mining is issued by the government in Nov 2019. During non-peak hours of these four months, miners can continue their operations and will be charged $0.16 per kWh for each kWh consumed. For the remaining cold 8 months of the year, around $0.04 per kWh will be charged to miners.
Additionally, the government has offered an incentive to those who would set up their own power plants for mining digital currencies, adding if a failure occurs to generate electricity from renewable sources, the government would back-up these plants; taking into consideration that the government will also offer various bounties in different sections of this field.
Imam Khomeini International Airport’s (IKIA) free trade zone is ready for economic activities through the establishment of a new customs building and stock room since June 2019. The purpose is to evolve IKIA into a major cargo and passenger hub in the Middle East.
IKAC, which includes a 1,500-hectare free trade zone and a 2,500-hectare special economic zone in a 13,700-hectare area, aims to help national and international companies to cluster around the airport and engage in business activities. The unique geographical location of Iran and its altitude in comparison to the International airports of Iran’s neighboring countries makes it reasonable to invest in the expansion of IKAC. IKAC is looking for investors in international finance, as well as owners of know-how in this industry. This is good news for who may wish to make investments in free zones.
According to Iranian laws and regulations, the main advantages of free trade zones are:
1) 20 years income tax exemption for any type of economic activity
2) No requirement for foreigners to obtain a visa
3) No limitation on currency transfer
4) Exemption from certain customs duties
Connecting IKIA to the international transportation networks, including the East-West and North-South corridors, as well as linking it to the national railway and Tehran’s subway system are among the main steps to achieve such a goal.
more on boosting non- oil exports recently. One of the approaches is to target the markets of neighboring countries Iran has adopted a policy of the least reliance on oil revenues and focusing more and by entering into various agreements with different countries. One of these agreements is the trade agreement between Iran and the Eurasian Economic Union officially, which came into force on October 27, and its implementation was formally notified to customs offices across Iran last week. The accession of Iran into EAEU is a significant breakthrough for Iran’s trade as it would allow exports on zero tariffs for 70 products while 503 other items would enjoy lowered duties, according to Iranian Energy Minister Reza Ardakanian.
This process means that the Iranian state-owned companies, private companies and people in business can export these goods at much easier terms and with much lower customs duties (even zero for some categories of products) to the Eurasian Union member states, which are often Iran’s neighbors and Eurasian Union businessmen can also trade with Iran with greater convenience.
In other words, in this event, to enjoy the maximum potential of the market, fully corporation of government and private is needed. Most importantly private sector needs an organized plan due to inconspicuous presence in the regional market. This market is going to give a chance to those who want to enter an enormous market and is an excellent opportunity for national companies to get involved in business with companies over the seas.
Indian government sources have said that New Delhi has recently allowed investment in Indian rupees in Iran, the Again Age reported on Friday.
The announcement was made simultaneous with Iranian President Hassan Rouhani beginning his visit to India from Hyderabad on Thursday.
Sources said this will not violate U.S. sanctions on Iran since transaction will not be in U.S. dollars. The Indian move will hugely help the Iranian economy as it will draw in more Indian investment into Iran.
If an Indian businessman wants to invest a certain amount in rupees in the bona fide concerned Iranian account in one of the Indian banks and the equivalent amount of Iranian rials will then be deposited in the venture in Iran, sources said.
India’s contribution to the development of Iran’s Farzad B gas field in the Persian Gulf and its operation of Chabahar Port in southeast of Iran are among the issues to be discussed between President Rouhani and Prime Minister Narenda Modi on Saturday during delegation-level talks.
Iran’s state company in charge of thermal power plants has announced that it is planned to reduce the government’s footprint in the key energy industry through selling a part of its shares in such power plants.
In this regard, Mohsen Tarztalab, TPPH’s Managing Director has stated “Thermal Power Plants Holding Company aims to sell stakes in an undisclosed number of power plants with a combined installed production capacity of 11,570 megawatts to the private sector”. He has also added “Four power plants have been listed by Iranian Privatization Organization for sale and the outcome of their tenders will be publicized on Feb. 13”. Such four power stations planned for sale are located in the northern Gilan Province, Semnan Province east of Tehran and the East Azarbaijan Province.
And perhaps the most important part of Mr. Tarztalab’s speech was that there is no restriction on foreign investors taking over Iranian power stations which offers a great opportunity for foreign investors to secure a strong foothold in Iranian energy sector.
In general, the divestment program will account for nearly 15% of Iran’s total installed power generating capacity that stands at 77,000 MW. The efforts are aimed at breathing new life into an aging power industry that is overshadowed by state control over most of the production and supply chain, a lack of investment and ballooning debts to power plant operators.
TPPHC is in charge of developing 7,000 MW of gas-powered units in Jahrom, Sabalan, Kashan, Urmia, Chabahar and Asalouyeh combined cycle power plants as well as completing Parand Power Plant south of Tehran.
Iran requires increase in power generation capacity to shore up domestic power supply and increase electricity exchange with neighbors as part of it strategic scheme to establish a regional power network throughout the Middle-East.
Tehran is scheduled to be host of the first International Power Generation and Turbo Machinery Exhibition and Conference, also known as IPGTEC 2018. The event will be held in Tehran International Fairground from March 2 to 5. IPGTEC is a platform in which power industry meets the flow of information on modern power generation and achieved technological advancement. It also provides an opportunity for scientific society to discuss the newest findings and promising ideas on eco-friendly approaches of power generation as well as potential challenges. For the ones who are involved in energy industries, this event is a good chance to discuss solutions for advancing future of energy in Iran and the region.
The participants of this conference are more than 100 Iranian as well as foreign companies. Italy, the Netherlands, Germany, the United Kingdom, Japan, Belgium, Taiwan and China will participate in the event to showcase their latest products and services related to turbo systems, generators and rotating machinery. It helps the businessmen to access a wealth on technological advancements on power and turbomachinery industries to drive new business and partnerships with power industry’s leaders. It’s a networking tool that enables exhibitors and delegates to search and arrange meetings either in advance or during the exhibition. Trade professionals and leaders of power industry as well as companies are the ones whom the visitors will network with at IPGTEC 2018.
There will be also several workshops on the latest trends and challenges of this industry in the region. IPGTEC workshop sessions are about Asset management in power industry, Condition monitoring and value added maintenance, Gas turbine life assessment and extension, Root cause analysis in power industry and turbomachines, OEM & non-OEM related insurance liability and risk management in power industry, etc.
Due Iran’s power generation sector is moving towards one of the world’s most modern power industries and it is one of the largest power sectors in the Middle East, with a rapid forecasted annual growth rate, attending such conference will help to grow the industry and undoubtedly these kind of specialized exhibitions are known as the most effective platform for enhanced collaboration.
Chief of the Central Bank of Iran, who heads the entity regulating the financial market, said “transparency in the capital market is undoubtedly a prior condition for the development of this market and promoting its role in the economy.”
According to CBI website, Valiollah Seif said that transparency begins with the rules and regulations governing the market and then encompasses trade mechanisms and strong oversight.
“Among these, one of the most important elements is transparency in the financial reporting system and financial reporting of securities issuers,” he said.
“Perhaps there is no other characteristic in the stock market that equals financial transparency because in today’s world decision-making is based on forecasting and good forecasting is dependent on healthy and transparent information.”
CBI as the financial sector’s regulator and the Securities and Exchange Organization as the entity regulating the stock exchanges have in the past been at loggerheads over certain issues.
Mandatory upgrades in banks’ financial reporting standards which led to the adoption of the International Financial Reporting Standards (IFRS) by all Iranian lenders in 2016 caused disruption in their stock functions after unhealthier balance sheets emerged in light of the new standards.
Dismayed by the new revelations, Tehran Stock Exchange had to halt the trading of many of its listed banks in the aftermath. For some of the banks, the trading suspension has yet to be lifted.
Seif referred to this reform in banks’ financial statements along with curbing the inflation rate, management of the currency market, organizing the unlicensed credit institutions and enhancing supervision over banks as steps taken by the CBI to promote transparency.
Seif called for drawing on the experience of other countries in stock-related issues in order to put a permanent end to “bad accounting” practices in the country.
The official called for a resolution to the conflict of interest between accounting and auditing by devising three main sectors to handle the issue separately. He referred to the three sectors as one for “devising accounting rules,” the other “regulating the works of auditors” and the last for “auditing the public sector.”
He announced plans for the full adoption of the latest IFRS standards for banks and said the regulator is willing to enhance cooperation with the SEO to promote transparency, which he said would ultimately benefit both the capital and the monetary market.