A powerful legal tool in evolving solid waste management (SWM) systems is extended producer responsibility (EPR). It is a mechanism that shifts the responsibility of a product to manufacturers/importers at the ‘end-of-life’ stage. Yet, implementation of the EPR concept has faced difficulties in developing countries. In Iran, as one such country, the principle of EPR system was issued in executive regulation of SWM in 2005, however, so far, it has been limited to a voluntary scheme. The problem merits further investigation. Therefore, this study aims to shed light on the obstacles in the path of developing EPR system for product packaging. The research examines the current SWM systems in four functional classified frameworks: legal, institutional, financial and technical. The strengths, weaknesses, opportunities and threats of the system are elaborated through semi-structured interviews with a senior executive in the Ministry of Interior (MoI). Then, viable methods to increase resource efficiency and sustainable waste treatment are suggested. The change in the financing mechanism in the Budget Law 2020 forces the manufacturers/importers of products containing recyclable components to pay the revenue from one in 1000 products to MoI for developing recycling facilities and incinerators through partnerships with the private sector. This new strategy would promote proper management of product packaging, create more jobs and a market for international cooperation. However, poor source-separation of wet/dry waste, informal sector activities, exclusive focus on the economic aspect of waste management, lack of expertise and public awareness campaigns are the barriers in this regard.