Tax policy in Iran due to the uncertainty of selected macroeconomic variables

Document Type : Original Article

Authors

1 Departmenet of Economy - management college - Islamic Azad univercity - Arak-Iran

2 Department of Economy/mamagement college/Islamic Azad Univercity/Arak/Iran

3 Department of Economy/management college/Islamic Azad Univercity/Arak/Iran

Abstract

The purpose of this article is to examine the uncertainty of oil prices, inflation and exchange rates and its impact on tax revenues and its compliance with tax policies. Given that Iran's economy has always been volatile due to structural reasons such as dependence on oil revenues, high inflation, annual budget deficits and currency fluctuations, the question arises as to whether tax policies have been able to act as a financial instrument able to neutralize or control the negative effects of these uncertainties? To achieve the objectives of the research, the specified model and the Generalized autoregressive conditional heterogeneity model (GARCH) based on seasonal data from 1988-2018 were used. The research findings confirm the uncertainty of the variables and show that tax revenues have been significantly affected by changes in oil prices, exchange rates and inflation. Also, the compliance of quantitative results with the policies contained in the development plans and annual budget laws shows the lack of attention to these effects in tax policy and the incompatibility of the financial and tax system with it.

Keywords

Political Sociology of Iran
Volume 5, Issue 8
October 2022
Pages 1949-1968

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