Journal of Tax Research

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Legal structure of Kharaj tax has some essential differences with that of Zakah because the imposition of Kharaj is among the Islamic government's authorities and is not based on the individual's religious obligations. There are two properties for Kharaj tax which provide the basis for comparing it with VAT on consumption: "the inclusiveness of the tax base" and ''the flexibility of the rate".

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This paper aims at presenting a theoretical explanation of economic factors involved in the emergence and development of tax evasion in the VAT system. According to the model proposed here, it is inferred that an increase in the cost payments subject to VAT will result in an increase of tax evasion or a decrease of tax compliance. Moreover, an increase in the probability of being caught or an increase in the sanction rate (as for cases where the tax files are not investigated) will result in an increase of tax compliance level and a result, in a decrease of tax evasion. The findings obtained, having supported theoretically, can help the Iranian VAT authorities in adopting a variety of appropriate policies to prevent tax evasion.

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Nowadays, money laundering is considered as one the major financial crimes in the world and consists of converting or transferring a property for the purpose of concealing its illegal source or of assisting any persons engaged in committing such crimes. Tax evasion is a sub-category of money laundering and, in many countries, both tax evasion and money laundering are pervasive. So, tax system reform is one of the most important strategies for fighting against money laundering. In the Iranian economy, too, there has been an increasing focus on fighting against money laundering since a few years ago. In addition to the approval of the Act for Fighting against Money Laundering by Islamic Consultative Assembly in 2007, the implementation of some tax plans and laws have already assisted or will assist the realization of this goal. Among these plans and laws, one may refer to the implementation of VAT system, the obligation imposed on the issuance of invoices, Tax Automation Reform Administration (TARA) plan, and the assessment of feasibility of reintroducing the aggregate income tax system.

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The present research aims at exploring the impacts of replacing VAT for company income tax (CIT) in non-producing companies of Golestan Province. To this end, the taxable income of a sample of 283 companies was extracted and the value-added of each company was estimated through the accumulative method bearing in mind four rates of 1.5, 3, 7, and 10. Since the research data was not normal, we have made use of non-Parametric Wilcoxon Test and Friedman Test. The findings indicate that the replacement of VAT (with rates of 1.5, and 3) for CIT in non-producing companies will result in a decrease in the provincial tax revenues while the replacement of CIT with two VAT rates of 7 and 10 will lead to an increase in tax revenues. So, if the government decides to substitute the modern, revenue generating and transparent system of VAT for the current system of CIT, it is recommended to use VAT rates of 7 and 10, the latter being internationally supported.

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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.

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One of the newest business activities in recent years is related to the emergence and development of e-commerce. The extension of e-commerce increases the possibility of evading from the taxation of new income resources which have traditionally been taxed in other ways. Having in mind the importance of this matter, the present research is going to investigate e-tax systems throughout the world and to introduce a model for the establishment of an electronic taxation system in Iran. An infrastructure needed for e-commerce is to provide for security which is very important in the e-commerce environment and for which there is a large amount of demand. Lack of security in the virtual world can be a barrier to the development of e-commerce. Our proposed model for the taxation of e-commerce in Iran is based upon making use of a secure electronic exchange database whereby the government presents security to users and exchangers and, at the same time, taxes their e-commerce activities. In this paper, we have used Delphi method and Sign Non-Parametric / Freidman tests to assess our proposed model of e-taxation. The findings obtained are as follows: the best tax category to be applied to e-commerce is VAT but the Iranian VAT laws and regulations should be modified prior to being applied to e-commerce the creation of an electronic database by the Iranian government is economically justified real and legal entities in Iran are sufficiently willing to make use of this electronic database a national TIN code is required for the identification and tracing of companies engaged in the electronic environment the best way of providing security in an electronic database is to use digital signature and digital certificate sellers are the best agents for the collection of taxes moreover, there is a need for concluding agreements with other countries on such topics as the exchange of information and avoiding double taxation.

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Value Added Tax (VAT) law is one of the important economic laws in Iran. After design and approval of VAT law in Iran’s parliament, it has been implemented since October 2009. However, from oneset of such tax law, some challenges, disputes and concerns arised by economic agents and activists. Finally, such events and other similar cases would lead to a change in enforcement of the VAT act. Hypotheses investigated in this paper are as follows. 1. Lack of facilities and poor law-executive infrastructure of lran’s economy have been main obstacles for a full implementation of the value added tax law in relation to trade :::union:::s and businesses. 2. Lack of attention to certain exchange transactions of goods and services with special features such as Gold and jewelry has led to non-compliance behavior of some activists with respect to execution of the VAT law. 3. Lack of adequate training of taxpayers and economic activists poor information about executive details of the VAT act has resulted to some resistances against implementation of the VAT act.

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The main target of this research is to study the economic effects of VAT implementation especially in respect of revenue-rasing and its relationship with performance tax of commercial companies in Nothern Tehran Tax Office. In other words, this study evaluates the relationship between commercial companies' performance tax and VAT and also between these companies' peformance tax and their value added. The significance of the difference between performance tax and VAT of the selected companies in a sample is also tested. For this purpose, 203 commercial companies with more than 20 billion rials sales per year were selected randomly as the sample size and their information of the year 1388 were extracted from their tax records. The results of regression models indicate that their VAT could not cover their performance tax completely. The hypothesis that VAT is proportional to performance tax couldn't be accepted firmly in the whole sample companies. In different classifications which are based on sales amount and activity type of companies, the results show that tax bases in companies with low annual sales couldn't support these mentioned relationships. While the results show that performance tax and VAT are proportional in companies which have high annual sales and VAT can cover performance tax well . In relation with the differences between performance tax averages and its VAT in the selected companies based on T – test, this paper has concluded that between these two averages there are meaningful differences and the average of performance tax is higher than the average of VAT.

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One of the most controversial field in VAT is VAT refund. The experiences of different countries indicate that refund of credits is Achillian heel of VAT system. This results in tension among tax authorities and taxpayers and in some countries result in complex measures which has weakened VAT system performance. In tax authority opinion, high level of refund request is often main reason of delay in refund payment. Review of related request in most tax organizations of less develoed countries is time- consuming and expensive which result in delay of refund requests and dissatisfaction of those taxpayers who deprived of their working capital. On the contrary the most efficient tax organizations fight against refund request fraud in a form of their comprehensive strategy of VAT compliance based on risk management principles. This research, in a framework of a comparative study reviews related VAT threats and approaches.

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This study which is a descriptive survey focuses on organizational factors influencing VAT evasion in Tehran city VAT directorate. The research population comprises of all VAT experts and taxpayers in Tehran city VAT Directorate. By using random sampling proportional to size and through Cochran formula sample size, 382 taxpayers and 132 specialists were selected. Cronbach's Alpha coefficient of reliability equal to 0.94 was calculated. For data analysis, Factor Analysis and One-way T were used.

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goods and services are exempted from VAT. This study attempts to explain a method for calculating VAT base by using a scientific method and reviewing a variety of external and internal studies which focus on modifying methods. Therefore, reviewing Mackenzie method which was used in 1991 for the first time, this paper estimated the VAT base in 1386 equal to 44% of the GDP.

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In this study, the overall process of VAT examination was extracted and summarized. Then two questionnaires were distributed randomly between Tehran VAT staff, one of them focusing on the auditing steps and the other on procedures' and instructions' problems and also examination forms of the VAT. Then, the data were analyzed by using non-parametric statistical methods including Goodness of fit test, Friedman test and Dunn test. According to the research results, in 95% confidence level, the hypothesis was confirmed. Therefore, all steps of auditing process except step 7 faced with problem and as a whole, stages 3 and 4 faced with the biggest problems.

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The economic fluctuations should be considered in financial planning and economic analysis. Since tax is the main revenue of government, it is necessary to pay attention to the different tax bases revenue behavior during different economic fluctuations. In this paper the relationship between VAT collection efficiency (as a proxy of VAT revenue) and a production gap (as an index for introducing business cycle) were investigated. The panel data method was applied for 25 member countries for the period of 1996-2011 for investigating the relationship between VAT revenue efficiency and production gap in an econometric model. The results have indicated that there is a positive relationship between production gap and VAT revenue efficiency.

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Conservatism as one of the most important topics in theory and practice of accounting has attracted the attention of many researchers in the world. Watts (2003a) provides four explanations for the accounting conservatism contracting (debt contracts, executive contracts, and firm governance), shareholder litigation, accounting regulation, and taxation. The first three explanations are supported in the existing literature. However, few studies have examined the relation between taxation and accounting conservatism. This study examines the influence of tax declared and government- assessed Income tax on accounting conservatism. To investigate this relationship, the multivariable regression model was used and for the operating conservatism definition, the Feltham and Ohlson (1995) model has been used, and for the tax cost, declared corporation tax is used. Findings of investigation of 1076 firm-years listed in Tehran Stock Exchange in the 2002 to 2012 by unbalanced Panel model, suggest that by 99% confidence level, relation between tax declared and the conservatism is positive and significant but the relation between Government- assessed tax Income and conservatism was not significant. Furthermore, these relations in first and forth quartile of firms that are grouped on the basis of conservatism exist with more significance. Accordingly consistent with the theoretical basis it can be concluded that tax cost is one of the motivations of applying accounting conservatism. In other words, accounting conservatism is one of the instruments that companies used in order to reduce their tax cost.

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It is required to apply special audit methods for value-added tax as a new tax system with the structure different from the old tax systems. There are a lot of researches on tax audit in different tax bases except VAT, as it is a new base in Iran. The present research has attempted to study methods for determining VAT audit risks in other countries and compare them with the current methods in this tax in Iran. The findings have indicated that in some countries in the first years of implementation of VAT system, buying and selling invoices cross-check is used to develop compliance, identification and recognition of risky taxpayers and removal of weaknesses in audit processes. In the next years of VAT implementation it is required to use sampling and random selection and even transaction class selection methods. Other research findings show that IT system, staff education and tax system integration are used as supportive actions for reducing VAT audit risks.

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  Abstract

  In this research, inflationary and distributive effects of VAT on different Iranian economic sectors are investigated. The results indicate that from 29 main category products (91 sub-category products), 15 category products have more price increase and 14 ones have lower price increase related to tax rate. According to weighted average results which present mean inflation effects of VAT in general Economy, 7.4 percent inflation would be predicted if VAT was implemented without any exemption, and if some inflationary sectors were exempted, the inflation rate would be 3.4 percent. According to the calculated Gini coefficients, it can be observed that Gini coefficients before VAT implementation are lower than other Gini coefficients. The difference between these Gini coefficients is unimportant so that the difference ranges from 0.0017 to 0.0052 after VAT implementation. In fact it can be said that indirect taxes substitution with VAT has regressive effects which is insignificant and can be decreased by exemptions and multi rates.

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Abstract

Tax revenue is one of the main government resources. But due to tax evasion and its consequences, the realization of the revenue faces great problem and the reduction results in a deficit of the state budget. The spread of tax evasion phenomenon is because of different factors. One of the tools developed by the legislators is tax sanctions for dealing with violators. The purpose of this study is to evaluate tax sanctions in preventing VAT evasion in Qazvin province. At first, by reviewing previous literature and through 120 questionnaires, experts’ and VAT taxpayers’ opinions were identified then by using Fuzzy DEMATEL techniques and views of 10 experts,  the possible relationships, the impact of each relationship and the importance of these factors were determined. The Analytical Network Process (ANP) techniques were used for weighing and ranking the factors. The DEMATEL and ANP power vis-a-vis the first generation of causal-effect relationships are in a way that the number of paired comparisons is greatly reduced and obtaining the opinion of experts becomes simple. The Sampling method is simple random. The results show that tax sanctions are affected by other factors affecting tax evasion reduction but they do not affect any of the indexes and its weights i the lowest compared to other indexes.

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This paper investigates the effect of tax policy on entrepreneurship in different countries. Therefore, LLC and IPS panel unit root, test for pooled and panel data and Hausman test for Factor-Driven, Efficiency-Driven and Innovation-Driven Countries data have been used in period of 2002-2014. The results shows that tax rate has different effect on entrepreneurial activity in countries with different classification; Such tax rates have negative and significant effect on entrepreneurship in Factor-Driven and Efficiency-Driven countries while this effect is insignificant in Innovation-Driven Countries.

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