TEHRAN, Oct 12: The Iranian capital’s traditional bazaar stayed on strike on Sunday to back calls for the scrapping of VAT (value added tax), even after President Mahmoud Ahmadinejad froze implementation of the tax for two months

Stalls were shuttered in Tehran’s main market, an AFP correspondent said, with policemen in uniform and plain clothes patrolling the area.

It is the first general strike at the bazaar since the revolution. The shutdown started in jewellery shops on Wednesday then spread to textile and carpet stalls, reaching its height on Sunday.

“Because of this tax, there is an increase of 10 to 15 per cent in prices, so we want the government to annul the law,” a shopkeeper standing by his closed business said.

The government last month introduced the value added tax at a rate of 3 per cent but traders say the effective rate will be higher because the levy will be imposed at every stage of the supply chain – from producer to consumer.—AFP