AFP, TEHRAN, Oct 8, 2008 – Shopkeepers in the Iranian cities of Isfahan, Mashhad, Tabriz and Tehran have staged strikes to protest against the introduction of value added tax (VAT), newspapers reported on Wednesday.

Shops in the bazaar of the central city of Isfahan, Iran’s third largest, have been shut for several days to protest against the VAT of 3 percent introduced by the government of President Mahmoud Ahmadinejad, the moderate Etemad daily said.

The Kargozaran newspaper said around 3,000 shopkeepers gathered on Monday outside the Isfahan governor’s office to protest against the new tax, introduced on September 22.

Major traders at the bazaar have withdrawn their money from banks in the city to protest against the measure, saying it will cause price increases which they will have to pass on to consumers, Kargozaran said.
Some shopkeepers in Tehran’s main bazaar also took part in the protest on Wednesday, an AFP correspondent witnessed. Some stallholders in the jewellery, gold and textile sections closed their shutters.

“If the government does not back down, we will continue until it does,” one jeweller told AFP asking not to be named.

A textile dealer told AFP that while other sections of the bazaar remained open, “this movement can expand.”

In the big northwestern city of Tabriz, gold dealers and jewellers have gone on strike, the ISNA news agency reported.

Rises in retail prices have accelerated since Ahmadinejad’s government took power in 2005.

In September, the cost of a basket of 45 staple food items was up 50 percent on a year earlier, press reports said.

Annual inflation topped 29 percent in the Iranian calendar month that ended on September 21, a central bank report said on Wednesday.

Bazaars in Iran play an important political as well as economic role. Bazaar merchants contributed to the collapse of the regime of Mohammad Reza Pahlavi during the 1979 Islamic revolution, when they went on long strikes.