Tehran bazaar shuts its doors in anger at Ahmadinejad tax hike

News in pictures
News in pictures
On Facebook
From the blogs

Roy Hodgson for England: A club of one

To argue against Harry Redknapp for England is akin to arguing in favour of bankers bonuses. While s...

Time for a reality check on the Sri Lankan civil war

Sri Lanka, much like Britain, has side-lined accountability long enough.

Children Of Alcoholics week: One million children may just be the tip of the iceberg

Children Of Alcoholics week starts today. So, what are the aims for Nacoa during this important week...

Review of Being Human: ‘Being Human 1955’

Following on from an episode tinged with tragedy, this week lifted the mood with something lighter.

Everything from dried rose petals to $5,000 (£3,300) silk carpets to cheap sweets and gaudy plastic sandals could be found on sale in Tehran's grand bazaar. The vast covered market, its narrow lanes typically heaving with shoppers and the raucous sounds of busy commerce, stands empty now, though. The bazaris, the city's merchant classes, have shut their doors in protest at tax hikes proposed by President Mahmoud Ahmadinejad.

For a second day yesterday, the authorities ordered a public holiday, ostensibly because of the unusually high summer temperatures, but in reality, many Iranians speculated, to camouflage the strike and head off any trigger for a mass outpouring of public protest. The merchants' action, which began last week, is a clear and potentially grave challenge to the authority of the hardline president.

Mr Ahmadinejad's standing had already been considerably weakened following the repressive handling of last year's post-election street demonstrations and a subsequent power struggle within the Islamic regime. The bazaar is a traditional stronghold of political and social conservatism and because its support for the Islamic revolution in 1979 was so pivotal, carries huge symbolism. For the president to be at odds with such a loyal institution suggests that bigger political trouble is brewing.

Anger in the commercial hub, which, at least until much of the economy fell under the control of the elite Republican Guards, used to be the nation's economic heartbeat, erupted over a decision to raise the rate of value-added tax. The gold sellers were reportedly the first to shut up shop, followed by others. Black banners were reported to have been draped over some stores and Iranian opposition news sites have reported clashes after security forces attempted to force the shops to resume trading.

The head of the union of fabric sellers in the old bazaar was allegedly detained after trying to rally fellow traders for a protest meeting. In the shoemakers' area of the bazaar, meanwhile, hundreds gathered at the end of last week, according to opposition reports (which could not be independently checked) chanting "Death to Ahmadinejad!" and "Death to this government!".

The government has already said it will back down on its initial proposal for a top rate of 70 per cent sales tax, but many of the merchants have remained defiant, saying they will stay closed because their annual taxes had risen so steeply in the past year.

Some complain that they are paying $5,000 a year, up from around $1,500 annually. Value-added taxes have risen by up to 15 per cent a year, depending on the commodity. "We cannot even pay salaries to our employees. How can we pay higher taxes?" Ali Akbarzadeh, a jewellery seller, told Reuters.

Faced with falling oil prices and a big ratcheting up of US and UN sanctions on its energy sector, Iran's government has been trying to introduce internal reforms, scaling back on the generous food subsidies that cushion Iranians from the true costs of production or importing, and raising taxation.

But with inflation and unemployment rampant, many are feeling the pinch. Many blame Mr Ahmadinejad for economic mismanagement, since, during his first term, he lavished oil revenue on certain sectors.

There was some speculation that the striking shopkeepers were affiliated to factions within the Islamic regime that have grown disaffected with the president and his inner circle following last year's poll. Some are said to be close to Ali Akbar Rafsanjani, the former president, a leading cleric and sworn enemy of Mr Ahmadinejad.

Day In a Page

Apple admits it has a human rights problem

Apple admits it has a human rights problem

After years of complaints and workers' suicides in China the technology giant faces up to the human cost of its gadgets
Peter Moore: 'I feel guilty I'm the only one alive'

Peter Moore interview

'I feel guilty I'm the only one alive'
Sellafield faces nuclear option as overspending threatens plant's future

Sellafield faces nuclear option

Overspending threatens plant's future
Israel blames Iran for embassy bomb attacks

Israel blames Iran for embassy bomb attacks

Tehran rejects Netanyahu's 'lies' after diplomats in India and Georgia targeted
Former manager enjoying Apoel crack at the big time

Tommy Cassidy interview

Former manager enjoying Apoel crack at the big time
James Lawton: Patience may not be a virtue this time, Roman – Andre Villas-Boas looks all at sea

James Lawton: AVB looks all at sea

Abramovich's visits to training reinforce the idea of a coach feeling pressure from above and below
The 10 Best sledges

The 10 Best sledges

Not all of them require snow...
Procrastination: Not now – I'm busy

Procrastination: Not now – I'm busy

Confronting the real reasons for puttting things off can help us beat it
Fun in the sunset years

Fun in the sunset years

A new movie follows retirees moving to India for low-cost care and a culture of respect for the elderly. For many Britons, it's already a reality
Picture preview: Lucian Freud drawings

Lucian Freud drawings

Picture preview
Silent revolution at the Baftas as the French take top awards

Silent revolution at the Baftas

The Artist wins in seven categories, with Meryl Streep the other big success story
Whitney Houston: The diva who had – and lost – it all

The diva who had – and lost – it all

Nick Hasted charts the highs and lows of Whitney Houston's life
How Picasso won over (some of) the British

How Picasso won over (some of) the British

Winston Churchill and Evelyn Waugh hated his work, but Picasso provided inspiration for a whole generation of UK artists
Topshop: A Decade Of Design

Topshop: A Decade Of Design

When London Fashion Week starts on Friday, Topshop will celebrate 10 years backing its brightest young stars
John Prescott: 'My wife thought I'd just retire, but I'm not a slippers man'

'My wife thought I'd just retire, but I'm not a slippers man'

At 73, John Prescott isn't mellowing. In fact he's taking a shot at becoming a police commissioner