Seyyed Kamel Taghavinejad, general director of the Iranian National Tax Administration, announced the exemptions yesterday, which will see hotels and other tourist accommodation as well as pilgrimage and tourism agents enjoy a zero tax rate.

Taghavinejad said the INTA is considering tax incentives for a variety of sectors and that the tourism industry, with its good prospects for prosperity and development, is no exception.

Revenues from private sector hotels and other forms of accommodation will not pay any tax for five years, which is extended to ten years in less developed regions.

Pilgrimage and tourism agents licensed by the relevant regulatory authorities will also be free from levies on their income. However, Taghavinejad noted that the tax exemption does not include revenues from sending holidaymakers abroad and can only be used for revenues gained from tourism within Iran.

Observers have noted that the tourism industry is likely to be a priority for the government now the Iran is free from crippling sanctions.

The country hopes to attract 20 million tourists a year by 2025 and expects the industry to be worth $30bn. Iran is rich with history, architecture, nature, Persian cuisine and even skiing.

The country has already announced the simplification of entry procedures, allowing visa on arrival for citizens of all but 11 countries including the US and the UK.