1 2251-6484 Iranian National Tax Administration (INTA) 130 Calculating Optimal Rates of “Business & Professions Income Tax” and “Corporate Income Tax” Hozhabr Kiani Kambiz b Mohammadi Fardin c Gholami Elham d b Professor of Economics at Shahid Beheshti University of Tehran c PhD Candidate of Economics d PhD Candidate of Economics, Islamic Azad University, Science & Research Branch 1 12 2009 17 6 7 40 06 04 2009 21 09 2009 In this paper, optimal tax rates for real and legal entity income taxes have been estimated. Optimal taxation means optimal maximization of total utility functions of entities with regard to the budget constraint and a constraint wherein the entities make their choices of labor supply taking into consideration the relationship between labor and income. The foundation of our estimation has been Diamond’s model (1998) which is itself an extended form of Diamond and Myrrless’s model (1971). This model is, in its turn, an adaptation of Saez’s model, an important optimal taxation model. The statistic population being used for the calculation includes real entities in Tehran and legal entities in Tehran and Kermanshah cities. In order to cover the fairness of income distribution, the statistical data has been classified in terms of income deciles, and Gini coefficient was calculated as an indicator of income distribution variance. Then, an appropriate model which is assumed to have the best impact on the decrease of the Gini coefficient has been selected. Finally, through the application of the selected model and taking into account different levels labor force elasticity (for real entities) and services supply elasticity (for legal entities), the optimal tax rates have been calculated. The results obtained indicate that in the Iranian tax system, the application of new rates would lead to a better distribution of income as well as an increase of 150% in the government tax revenues. Moreover, the calculated rates are able to be interpreted on the basis of an extended formulation of Laffer’s curve.
131 The Relationship between Organizational Health and Working Positive Attitudes in Isfahan Tax Affairs Head Offices Ansari Mohammad Esmaeil e Ostadi Hossein f Javeri Fereshteh g e Assistant Professor of Public Administration, The University of Isfahan f Assistant Professor of Economics, Islamic Azad University, Dehaghan Branch g M.A. Student of Public Administration, Islamic Azad University, Dehaghan Branch 1 12 2009 17 6 41 66 15 04 2009 21 09 2009 Taking into account the role and importance of human resources as a strategic resource in organizations and bearing in mind the human capital as the second major factor involved in the collection of taxes (the first factor being the national income), the performance of human capitals in organizations, specifically in the Iranian National Tax Administration is highly important. The present paper aims at exploring the impacts of organizational health on working positive attitudes. A sample of 279 members was selected out of a statistical population of 1219 employees through a categorized random sampling in proportion to the intended sample size. The research instrument has been a questionnaire of 41 items and as for the data analysis, we have first resorted to a descriptive analysis and then, we have done inferential analyses on the data gathered within Pearson’s correlation, multi-variation regression analysis and variance analysis methodologies. Research findings indicate that there is a significant relationship between the organizational health and the employees’ working attitudes and that organizational health is of a great significance in INTA due the positive impact it has on employees’ working positive attitudes. 132 Forecasting Direct Tax Revenues (for the Fifth Five-Year Economic, Social, and Cultural Development Plan of I. R. Iran) Amin Rashti Narciss h Rezaee Mohammad Ghasem i h Assistant Professor of Economics, Islamic Azad University, Central Tehran Branch i M.A. in Economic Development & Planning; A Tax Researcher at Tax Research Department, INTA 1 12 2009 17 6 67 92 25 04 2009 21 09 2009 One of the most important components of the government budget is the tax revenues. Having knowledge of tax volumes which can be collected from different tax bases will help the government in optimally allocating the resources for tax collection purposes, in doing exact financial plantings, and in identifying the extent to which citizens have participated in providing for the government’s public expenditures. In the present research, we have made use of statistical data of the years 1961-2005 in order to estimate direct tax revenues (corporate income tax, individual income tax, and property tax) of the years 2010-2014 (the period covered by the Fifth Five-Year Economic, Social, and Cultural Development). The findings indicate that direct tax revenues will have an increasing trend in the fifth development plan and that the ascending trend of corporate income tax has not deviated from its long-term trend up to the year 2005 in the sense that the collected taxes have all the time been less than forecasted but as from 2005 onward, due to the addition of the performance of oil sector, the collected revenues have been more than forecasted. On the hand, as for individual income tax, the collected revenues have been less than forecasted and the revenues collected from the property tax category have been more than forecasted. 133 An Investigation and a Model of Rental Valuation for Business Properties in Tehran City Tax Affairs Organization Ghodrati Hassan j Doustdar Esrafil k j Assistant Professor at Islamic Azad University, Kashan Branch k M.A.in Accounting 1 12 2009 17 6 93 114 03 05 2009 21 09 2009 The present paper aims at exploring rental valuation of business properties. According to Iranian tax laws, rental valuation of properties should be done by a Real Estates Valuation Committee. This committee divides Tehran city into 162 blocks and allocates a rental value/square meters in each block. The present research is firstly aimed at determining indices and factors affecting the rental value of business properties and at presenting an appropriate model for valuation. Then, we test a hypothesis indicating that “the valuation procedure applied by INTA is inefficient” and compare our proposed model with INTA’s method. The statistical population of this research includes all business units acting legally within the geographical area of Tehran. Through some interviews and reviews of literature, we have characterized 16 indices as possibly affecting the valuation of rental value. Then, through developing a questionnaire to be filled up by experts of Tehran City Tax Affairs Organization, 9 indices have been separated as the most important factors. In order to develop the model, after selecting a sample of 383, the 9 indices in question have been measured. Then, in order to develop and validate the intended model, we have calculated the Spearman’s correlation coefficient along with Kendall’s coefficient in the significant level of 0.01 leading to the separation of 6 indices followed by running a linear multiple regression and the administrating the STEPWISE methodology. In the nest stage, estimated rental values have been calculated using both our proposed model and INTA’s methodology. The two sets of values have then been compared against the actual market rental values. The final stage of the research includes testing the “proportion of success” hypothesis (p) as well as testing the hypothesis of “comparison of proportion of success in the two populations” (p1-p2) in order to verify the research hypotheses. 134 Barriers to Complete Establishment of VAT System in Iran Mohammad Nourbakhsh Langeroudi Mohsen l Javadi Nikgou Mohammadreza m l Assistant Professor of Financial Management at Islamic Azad University, Rasht Branch m M.A. in Commercial Management 1 12 2009 17 6 115 138 19 05 2009 21 09 2009 Taxes are divided into two groups of direct and indirect taxes. VAT, as a tax levied on the consumption of goods and services, is a subcategory of indirect taxes. There are some barriers to the complete establishment of VAT system in Iran. The present paper aims at capturing these barriers in terms of their significance and their priorities. To this end, “complete establishment of VAT” has been assumed to be the dependent variable while some external/internal factors in both micro and macro levels are handled as the independent variables. The instrument for gathering data has been a questionnaire consisting of 39 items of which the validity has been verified by referring to experts and the reliability has been calculated through Chronbach’s Alpha Coefficient methodology (0.91 for macro external factors, 0.75 for micro external factors, and 0.88 for internal factors). The questionnaire has been administrated in a sample of 150 members including academic faculty members and VAT staff in Guilan and Tehran provinces. The data gathered has been analyzed through T test and Freidman’s statistical test. According to the results obtained, all macro external factors, internal micro factors and internal factors are respectively involved in incomplete establishment of VAT in Iran and as such, all hypotheses of the research have been verified. 135 Intellectual Capital: A Valuable Effective Capital for INTA Ashena Mostafa n Yousofi Hamidreza o Sadeghi Farzaneh p n M.A. in Public Administration (Human Resources); an Expert of Office for Training & Human Resources Development, INTA o M.A. in Public Administration (Human Resources); Director General of Office for Training & Human Resources Development, INTA p Deputy Director of Office for Training & Human Resources Development, INTA 1 12 2009 17 6 139 156 30 05 2009 21 09 2009 Nowadays, all organizations are required both to measure and manage their intangible assets and to continuously promote these assets in order to maximize the conditions needed for achieving their goals and objectives. Organizations which are not able to continuously promote their knowledge-based assets will inevitably sacrifice their survival. In this research we have studied such issues as the classification of organizations’ assets, definition of intellectual capital, the rationales behind focusing on intellectual capital and on measuring it, restrictions of traditional accounting systems, models and approaches to the measurement of intellectual capital, and (dis)advantages of internal / external reporting of intellectual capital. Research findings obtained indicate that the organizations’ achievement is a function of their ability in managing their intangible assets. In order to manage these assets, we should first identify and measure them. Since the Iranian National Tax Administration’s duties are governance-based in nature and since this organization is expected to provide for a considerable portion of the government revenues, it is obliged to identify, assess, and manage its intangible assets in order to make it possible to plan for making optimal use of these resources. 136 The Status of Simplification in Tax Reform Plans: Global Experience and the Challenges for the Iranian Tax System Zayer Ayat M.A. in Economic Systems Planning; Head of Economic Research Group at Tax Research Department, INTA 1 12 2009 17 6 157 184 02 06 2009 21 09 2009 In recent two decades, tax simplification has turned to be one essential component of tax reform plans in different countries. This is not only due to negative impacts complexity has on voluntary compliance costs resulting in tax evasion, but also due to the fact that it is a big barrier to tax fairness and efficiency (in case of income taxes) and as such, it is a factor far beyond administrative and compliance costs. Although a deeper understanding of various aspects of tax simplification requires more comprehensive investigations, this paper, which seems to be just a point of departure for putting such issues under discussion in Iran, aims at exploring different dimensions of tax simplification, reviewing different countries’ experience, and, in the end, offering some recommendations for reforming the Iranian tax system. Investigations show that a low compliance rate, a high volume of administrative circular directives, and an inappropriate combination of tax revenues do obviously indicate that the existing taxation system in Iran is quite complicated. Therefore, one of the essential challenges ahead of the Iranian taxation system can be tax simplification, in general, and tax laws simplification, in particular, which demands for a serious interaction between tax authority and legislating institutions.