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Tax distortions caused by Inflation in Iran
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Mohammadmahdi Bandeali Naeini *   , Kamran Nadri |
| Faculty of Islamic Studies and Economics, Imam Sadegh University (AS) , bandehali@isu.ac.ir |
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Abstract: (102 Views) |
| Inflation is a fundamental challenge for Iran's tax system, which causes injustice in the economic system by creating distortions such as changing the tax burden, reducing government revenues, and expanding tax evasion. The purpose of this research is to carefully examine these disorders and provide macro solutions to achieve a fair and efficient tax system in Iran's inflationary conditions. Based on the policy approaches of this research, policy makers should continuously act on the inflation indexing of Rial figures in the laws. This indexing can be done as a proportion of the tax exemption ceiling in Article 84 of the Direct Taxes Act, which is determined annually in the Budget Law. Also, in order to prevent the erosion of obligations, it is necessary in cases where shortening the legal opportunities is less harmful than the erosion of obligations due to delay, to shorten the Payment deadlines. In addition, it is necessary to determine the percentage of fines and incentives listed in Article 190 of the Direct Taxes Act, according to the expected average inflation on an annual basis. |
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| Keywords: Tax distortions, Inflation, Collection lags, Obligations erosion, Inflation adjustment |
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Full-Text [PDF 1100 kb]
(26 Downloads)
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Type of Study: Research |
Subject:
Special
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