Iranian Economy: Tehran's Baazar's Strike

In the first week of July, after the government tried to increase the taxes by 70%, the usually blasting Tehran’s Grand Bazaar went on a strike. Despite the government’s offer to reduce the initial 70% increase to 15%; the strike spreader to Tabriz’s Grand Bazaar as well, creating a major and historical crisis for the Ahmadinejad’s government. Although the strike is now over, the enduring news of the Iranian tax reforms maintains the concern among the merchants in the bazaar.
The heavy pressure of the International sanctions and the low prices of oil have persuaded the Iranian government to reconsider its tax policy. “Iran imposes valued added tax (VAT) at 3% on large corporations but not on smaller” (The Economist) business, leaving out the bazaar’s merchants. Historically, Tehran’s bazaar had a significant role in the 1979 Islamic Revolution. Their financial support for the anti-shah movements was a crucial assistance for Khomeini’s supporters. In fact, the cost of Khomeini’s historical flight from Paris to Tehran after the victory of the revolution was provided by the bazaar’s merchants. The influence of the Tehran’s bazaar within the country’s politics has rendered any reforms related to the bazaar’s business challenging.
The slow economy, increasing inflation, the concerning influence of the Iranian Revolutionary Guard Corps in the domestic economy and President Ahmadinejad’s policy of reforming the tax system has increased the number of his oppositions among the bazaar’s merchants. This means that as the critics of President Ahmadinejad are increasing, he has to fight on more fronts. If he is not able to diplomatically compromise a solution for such crisis, either his policies will be left incomplete or President Ahmadinejad has to rely on the influence of the Revolutionary Guard, increasing the militarization of the Iranian economy.