Among the key issues to be tackled in the "Bill on the Permanent VAT Act", is the management of the importation of certain goods, such as cars. In this regard, the governments in Iran have taken various measures to control the imports of luxury cars, including imposing bans and restrictions, levying duties and taxes, and deprioritizing or even prohibiting the allocation of foreign exchange to the importation of luxury cars. At times, however, these tools have been only partially effective or even totally ineffective in fulfilling the desired objectives.

Thus, in the "Bill on the Permanent VAT Act", the government has newly proposed to levy taxes on the importation of luxury cars, additional to the basic rates. According to Article 48 of the "Bill on the Permanent VAT Act", the production and importation of cars with engine volumes of more than 2500 cc, are subject to higher rates of VAT, in addition to the general taxes. However, levying fixed rates of taxes on the production and importation of cars with engine capacities above 2500 cc practically faces many hurdles. For instance, due to the advancement of technology, a number of cars with engine capacities below 2500 cc have greater power, are more expensive than cars with engines above 2500 cc, and better appeal to customers. This approach is inefficient in that the technological developments will contribute to the continuation of imports of expensive cars to the country continue, because minimum taxes are levied on them.

A survey of the experiences of 14 selected countries (China, Vietnam, Turkey, Australia and ten ASEAN members) on the management of importation of certain cars indicates that these countries control imports of cars by levying different VATs based on their engine capacity or price. According to the outcomes of the survey, the implementation of Article 48 of the proposed Bill, would not be expected to achieve the stated objectives. In order to give teeth this fiscal policy, it is recommended that either of the following scenarios be included in the above mentioned Bill: First scenario (levying taxes on production and importation of all cars according to their engine capacity): in addition to the taxes provided for in the "Bill on the Permanent VAT Act", importers of cars will be required to pay extra taxes proportionate to engine capacity; Second scenario (levying taxes on production and importation of all cars according to their price): in addition to the taxes provided for in the "Bill on the Permanent VAT Act", producers and importers of cars, regardless of the engine capacity, will be required to pay extra taxes if the price of imported cars exceed certain thresholds.