The Impact of Tax Rates on Economic Growth of Iran in the Years 1981-2010
Journal of Finance and Accounting
Volume 3, Issue 6, November 2015, Pages: 220-226
Received: Nov. 1, 2015; Accepted: Nov. 22, 2015; Published: Dec. 10, 2015
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Authors
Mohsen Dehghan, VAT Department, the Tax Administration, Fars, Iran
Masood Nonejad, Economic and Management Faculty, Islamic Azad University of Shiraz, Shiraz, Iran
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Abstract
Several studies have shown that the country economy is based on oil and fossil fuel based, very vulnerable to factors such as war and sanctions. In recent years the Iranian government is trying to reduce dependence on oil and expanding the tax revenue. In this study the use of tax revenues, the effect of three types of tax rates including corporate tax rate, business tax rate and indirect taxes rate (each share of taxes in GDP) on economic growth in Iran during the Thirty Years' 1981-2010 with using of Auto Regressive Distributed Lags (ARDL) examined. In addition to these three variables, other variables such as annual population growth rate, inflation rate and degree of trade openness on economic growth is examined. The results suggest that the impact of the increase in the rates of these three types of taxes on economic growth is negative and significant, and for an increase in the rate of corporate tax rate, business tax rate and indirect taxes rate by 2/4 and 2/8 and 1/8 of economic growth is reduced. The results also reflect the positive impact of population growth rate, trade openness rate and the negative impact of inflation rate on economic growth in Iran.
Keywords
Corporate Income Tax Rates, Business Tax Rates, Indirect Tax Rates, Economic Growth Rate
To cite this article
Mohsen Dehghan, Masood Nonejad, The Impact of Tax Rates on Economic Growth of Iran in the Years 1981-2010, Journal of Finance and Accounting. Vol. 3, No. 6, 2015, pp. 220-226. doi: 10.11648/j.jfa.20150306.18
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Copyright © 2015 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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