Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

Why Gold Retailers Across Iran Are Striking?


Gold Prices

Tue 14 May 2024 | 05:13 PM
Waleed Farouk

Security agents arrested several gold merchants amid the ongoing strikes. Following a meeting between gold retailers and government representatives, According to the channel Iran International

Reports indicate that a verbal altercation ensued during Sunday’s meeting following threatening statements from a representative of the Industry Ministry regarding potential legal action against protesting gold retailers.

Gold sellers in Tehran's market began their strike late April – with other retailers joining in from other cities, including Tabriz, Ardabil, Kermanshah, Hamedan, and Mashhad. The primary grievance driving the strike is the reactivation of the Comprehensive Trade System, coupled with the introduction of a Capital Gains Tax.

The meeting was attended by representatives of the Ministry of Intelligence, the Ministry of Industry, the Tax Organization, members of the Tehran Gold and Jewelry Union, and several market traders.

Security agents present detained some of the gold retailers who were filming the meeting. It remains unclear whether these individuals have been released.

The meeting reportedly ended without any resolution to the talks between the parties.

Last week, regime agents sealed a number of gold retailers' shops in Mashhad in retaliation to the merchant’s participation in the nationwide strikes.

In further response to the strikes, Iran's Chamber of Guilds has issued a formal threat of legal action against the Ardabil Gold Dealers Union in northern Iran, as revealed in a letter obtained by Iran International.

The strikes commenced in Tehran's bazaar on April 28, spurred by the approval of new tax legislation by the Iranian parliament. Gold retailers shuttered their shops in protest against the Capital Gains Tax and the reinstatement of the Comprehensive Trade System.

Other gold merchants joined in quickly, expanding the strikes across Iranian cities.

Gold retailers have urged for the complete removal of the requirement to register information in the Comprehensive Trade System, which mandates that all manufacturers and sellers, both wholesale and retail, must register their transactions.

The newly introduced tax legislation requires gold retailers to pay taxes on gold assets surpassing 150 grams.

Iranian gold retailers assert that they have the "most transparent trade performance" and that they already make the "highest tax payments compared to other businesses."

"The tax burden on gold retailers in the past year averaged 15,000 USD, equating to only 129 USD per month," Mehdi Movahedi, spokesperson of the Iranian National Tax Administration, stated in a television interview last month.

Nader Bazarafshan, the head of the Tehran Gold, Coin and Jewelry Union, stated in a media interview that "gold retailers have no issue with the tax system."

He added that their objection lies with the Comprehensive Trade System's requirement to record their capital and inventory information. Bazarafshan emphasized that gold retailers are questioning why they should register their ancestral capital in the Comprehensive Trade System.

According to the Gold Dealers Union, "two million people" are employed in this trade.

As the Iranian rial depreciates against major currencies, gold, much like real estate, automobiles, and imported goods, is seen as a crucial capital investment by Iranians to safeguard their savings.

Iranian gold retailers are opposing the regulations of the Comprehensive Trade System, particularly the requirement for them to input their customers' information.

They believe that this obligation, combined with the recently implemented Capital Gains Tax, will place an additional financial burden on ordinary Iranians who are already finding it challenging to save money to buy gold as a way of safeguarding their earnings.

Gold retailers also point out that under this Capital Gains Tax, people will be discouraged from purchasing gold.

Some experts have cautioned that this could exacerbate inflation, which has already surpassed an annual rate of 50%, according to the Central Bank of Iran.