Iran Halts New Sales Tax After Merchants Strike by Thomas Erdbrink FROM Washington Post

"TEHRAN, Oct. 8 -- A series of private-sector strikes has forced the Iranian government to suspend the implementation of a new sales tax borne most heavily by the politically powerful merchant class, marking a setback for President Mahmoud Ahmadinejad's plans for economic change.

In a rare show of public protest, angry shopkeepers refused Wednesday for the second straight day to open stores in the central bazaar in the city of Esfahan. Many shopkeepers in Tehran, Mashad and Tabriz also refused to sell goods in protest of a tax measure that took effect in the final week of September.

Under the new sales tax law, merchants must pay the Iranian government 3 percent of their sales receipts. Some analysts here predict that the tax will be passed on to shoppers in the form of higher prices, meaning that business in some cases may suffer."