Stalls were shuttered in the capital's main bazaar, an AFP correspondent said, with policemen in uniform and plainclothes patrolling the area. The main gate remained closed and shoppers returned empty-handed.
"Because of this tax (VAT), there is an increase of 10 to 15 percent in prices, so we want the government to annul the law," a shopkeeper standing by his closed business said.
"By closing our shops we are losing money for a few days but if we do not succeed we will lose money for ever," another bazaari said of the bazaar shutdown launched on Wednesday.
"I hope the bazaaris win and not the government, since I would be purchasing things more expensively because of the new tax," said a dissatisfied consumer.
The value added tax of three percent came into effect on September 22, but after press reports of strikes last week in the provincial cities of Isfahan, Mashhad and Tabriz, Ahmadinejad on October 9 ordered a two-month freeze.
Ahmadinejad in a letter to his Economy Minister Shamseddin Hosseini said the reason for the suspension was "to remove the obstacles and problems facing the correct execution of the law."
"We believe this law (VAT) should be implemented but there must be enough time for a briefing. We demand a year or at least six months of suspension," the head of Tehran's business and production assembly, Mohammad Pour Mazraeh, told the labour news agency ILNA.
Rises in retail prices have accelerated since Ahmadinejad took office in 2005. In September, the cost of a basket of 45 staple food items was up 50 percent on a year earlier, press reports said.
Annual inflation topped 29 percent in the Iranian calendar month that ended on September 21.
Iran's bazaars play an important political as well as economic role. Its merchants contributed to the collapse of the shah's regime during the 1979 Islamic revolution when they went on long strikes.
