Journal of Tax Research

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Tax evasion in country's import is unobservable and it is not reported in formal statistics. This paper investigates the relationship between tax evasion and tariff rates at the two- digit HS level by panel data pattern. Tax evasion has been defined as the difference of import and export reported between Iran and its major 12 trading partners from 2003 to 2008. According to tax evasion models there is a positive and robust relation between tax evasion and tariff rates. Paper’s results imply that one percentage point increase in tariff rates is associated with 0.9 percent increase in tax evasion in Iran import. Moreover, tariff rates has more impression on tax evasion in imports with the highest- tariff categories to all of the commodities. For imports with highest tariff, one percentage increase in the tariff rates lead to 1/3 percent increase in tax evasion. Trade difference or Import under- invoicing related to 10 commodity groups with highest tariff has estimated $ 2302045.

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Abstract

Fiscal illusion influences situation of government budget. In this paper first, has been studied possible of asymmetry in government budget using Threshold Autoregressive (TAR) and Momentum Threshold Autoregressive (MTAR) models. Then is examined hypothesis of fiscal illusion in Iranian economy. In this regard, has been specified an Error Correction Model (ECM) via the indirect tax revenues seasonal  data from during (1380- 1392 ) that the results from estimation of model show i) there is a negative casual relate on the indirect taxes to government expenditures with three lags. This finding emphasizes the existence of fiscal illusion in Iranian economy ii) is confirmed the asymmetry effect of indirect taxes on government expenditures as there is fiscal illusion in situation of reducing indirect tax iii) since indirect taxes compared to direct taxes are less observable, reducing indirect tax due to fiscal illusion and misperception of people the public services and goods price lead to increasing demand for goods and services of public. Therefore, reduction of tax cannot apply as efficient tools in order to decline of budget deficit.                                                           

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Abstract

One of the basic priorities of government is public satisfaction and increased level of welfare which in turn is naturally depended on government revenue; tax is a source of government revenue through which public products and services are provided. Tax payment has a fundamental importance because a part of purchase power and savings of the society is transferred to the government to provide things such as health, training, security, and other public goods and services. The purpose of the current study is to determine optimized tax rates which can both satisfy people and remove the limitations of governmental budget in Iran economy. To achieve this objective, a public balance pattern has been provided with three sectors including households, agencies, and government-money position in which each sector tries to optimize its objective given its restrictions. In this line, firstly, the utility function of households through optimization using Genetic Algorithm would achieve optimized value of public goods demand applicable to tax payment by people. Then, optimized tax rates applicable to the optimized level of public goods demand are extracted through which achievable optimized tax rates are obtained by the government during 2000 to 2012. The optimized tax rates have been calculated in two contexts of availability and non-availability of oil income in governmental budget limitation. The results of estimations indicated that tax income performance and optimized government in the context of availability of oil income are different and the difference has high variations. Meanwhile in the context of non-availability of oil income in the model, there is a little different between tax income performance and optimized government. The findings revealed that oil income affects government performance in tax collection. By using maximum tax capability of a country and enhancing tax base, tax system performance can be improved and this leads to provide public goods and services for citizens by less dependence on oil income.

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Tax is one of the financial policy tools in regulating various economic activities to achieve economic balance and to establish social justice. Tax policies can not only help to provide financial resources for government, but also contribute to economic development and growth. Government can use appropriate tax policies and an optimized combination of direct and indirect taxes to accomplish successfully optimized resource assignment, redistribution of income and social justice. So, tax revenues affect the efficiency of financial policies implementation. One of the factors affecting government performance in receiving tax revenues is rent-seeking opportunities through which the possibility of tax payment lags may occur. This paper tries to extract the optimized tax rate in the context of rent-seeking economy in terms of a public balance system and intelligent optimization methods (Genetic algorithm). The results of optimization of described models indicated that in the context of rent-seeking in government tax revenues, tax on consumption is more than optimized level and conversely, tax on wage and payment is lower than optimized level. These findings indicate that the possibility of rent-seeking on wage tax is more than consumption tax due to implementation complexity and its reception. Meanwhile, rent-seeking in consumption tax is lower than another due to transparency and a single rate.
 

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Taxes are the most stable government revenues and they can be used as tools to implement social justice and to encourage investment. The purpose of this article is to determine the optimal vat rate by using a neoclassical growth model in Iran. To this end a generalized segmented growth model including household, firm and government was first developed. Using the parameters of the Iranian economy and social accounts matrix (Sam 1395), the mentioned model is calibrated and the optimal tax rate is determined in two scenarios in such a way that it receives the most income and has the least disruption. The research method is analytical and using a macroeconomic model. The research model is in the framework of computable general equilibrium model (CGE) and tax achievement in different scenarios. The results show that the implementation of vat at different Rates and in two scenarios 5 and 10 percent will increase the general level of prices, reduce GDP, increase government revenue, reduce household income and expenditure, increased total absorption and exchange rate.