Iranian bazaar merchants protest government tax raises, 2008

The Iran bazaar merchant strike represents two similar campaigns, one occurring in October 2008 and one in July 2010. The two strikes drew from the same social group (the Iranian merchant class), had similar objectives, and encompassed the same tactic—a general strike that spread to several cities of Iran. Iran merchants do not have a history of frequent striking—the October 2008 strike was the first large-scale strike since the 1979 Iranian revolution, in which the merchant community also played an important and influential role within the opposition movement. Consequently, and also due to the extreme nature of the strike itself (several large bazaars were totally shut-down), it drew quick attention from the government.

In looking at the context of the Iranian merchants’ interaction with the government, it is helpful to first look at the merchant community’s role in the Iranian revolution. During this period the merchant class joined with the influential clergy in Iran to voice its opposition to the regime’s oppressive policies. Large-scale, mass striking across multiple sectors of Iranian society had a crippling effect on the economy. It is interesting to look at the way that foundations for social interactions between different levels of society are laid; the merchant-government interaction of the revolution period could be seen as the preceding groundwork for the 2008 and 2010 strikes – it was through this interaction that the merchants negotiated and asserted their specific power resources—control over a large sector of Iran’s commerce—in relation to the government.

On September 21, 2008, the Iranian government under President Ahmadinejad implemented a 3 per cent value-added tax levy (VAT) on all products, with the exception of basic, everyday commodities such as bread and other food products. Though the tax was approved by Parliament the preceding year, it wasn’t enforced until September, at which point merchants in several bazaars around Iran’s cities called for a strike to protest the increase.  While the tax is largely attributed as the stressor that catalyzed the strike, Iran’s economy had been worsening before the tax levy, and many merchants experienced very low levels of business.

The strike began on October 4, with jewelry and gold merchants in the city of Isfahan. The strike continued to spread, and by October 7, merchants of all types had joined the strike in several large cities including Shiraz, Tabriz, Qazvin, Mashhad, and the capital Tehran (where the city’s large Grand Bazaar was almost entirely shut down). Police patrolled the closed down bazaars, sometimes clashing with protesters when police attempted to threaten merchants to get them to open their shops. Additionally, there were reported attacks by protesters on shopkeepers who attempted to open their shops during the strike. The Association of Guilds encouraged the merchants to end the strike. However, other trade unions (mainly unions of specific groups of workers), expressed support of the strike. While no explicit or official list of objectives was announced, the primary goal was an end to the tax levy.

In response to the spreading strike, the government agreed to delay implementation of the VAT by 3 months, during which time several contentious issues could be negotiated; this compromise ended the strike. After the proposed delay, the VAT was raised annually by between 6 and 15 percent, the exact amount depending on the goods being taxed. 

In 2010 the government announced a tax increase of up to 70 percent on many commodities. The merchants again responded by implementing a strike. This time, the strike began with Tehran’s Grand Bazaar on July 6, 2010. Again, the strike wasn’t centralized within one particular group of merchants, but spread across sellers of various commodities, from jewelry, to carpets, to fabric. Traders complained that they couldn’t afford rent any longer, that revenue had decreased considerably, and that such a high tax raise would only exacerbate the existing problems.

Responding to these pressures, the government’s tax minister began negotiations with the bazaar merchants and bazaar trade unions. The same day as the strike initiation, the government reportedly agreed to not raise the VAT by 70 percent. However, striking continued into a second week, and by July 14 it had spread to several other large cities. On July 18, the Iran News Agency reported clashes between security forces and resistant bazaar merchants, with close to forty merchants injured.  Despite repressive measures and the government compromise, however, the strike continued to spread.

On July 19, a statement issued by the trade unions announced that the government had agreed to raise the tax by 15 percent instead of 70 percent. Unions also demanded that a fixed tax rate be delineated and maintained. One provision in the government compromise stipulated that, should merchants be able to show losses suffered during previous years, they could be considered for an exemption from a tax increase. Merchants and trade unions ended their striking activities after the compromise was reached.

An interesting feature of both campaigns is that, while the VAT supposedly affects certain commodities more than others (meaning some merchants would be more greatly affected by the taxation), sellers of all sorts of commodities took part in the strike – it was, in effect, a merchants’ general strike. This solidarity of the bazaar merchants seems to demonstrate some sort of organization and infrastructural coherence within the merchant community, which transcends the individualized effects of government policies and managed to unite the merchants under a specific objective.