Volume 28, Issue 3 (Autunm 2023)
JPBUD 2023, 28(3): 71-104 |
Back to browse issues page
Download citation:
BibTeX | RIS | EndNote | Medlars | ProCite | Reference Manager | RefWorks
Send citation to:
BibTeX | RIS | EndNote | Medlars | ProCite | Reference Manager | RefWorks
Send citation to:
Zaroki S, Motameni M, Salehi Baboli M. (2023). The Effect of Oil Rent on Tax in Iran, Focusing on the Role of the Underground Economy. JPBUD. 28(3), 71-104. doi:10.61186/jpbud.28.3.71
URL: http://jpbud.ir/article-1-2234-en.html
URL: http://jpbud.ir/article-1-2234-en.html
1- Department of Energy Economics, Faculty of Economics and Administration Sciences, University of Mazandaran, Mazandaran, Iran. , sh.zaroki@umz.ac.ir
2- Department of Energy Economics, Faculty of Economics and Administration Sciences, University of Mazandaran, Mazandaran, Iran.
3- Faculty of Economics and Administration Sciences, University of Mazandaran, Mazandaran, Iran.
2- Department of Energy Economics, Faculty of Economics and Administration Sciences, University of Mazandaran, Mazandaran, Iran.
3- Faculty of Economics and Administration Sciences, University of Mazandaran, Mazandaran, Iran.
Abstract: (801 Views)
Considering the underground economy and the dependence of Iran's economy on oil and the influence of the tax system on oil revenues, the present study attempts to investigate the effect of oil rent on taxes, emphasizing the role of the underground economy for the period 1973-2021 in the form symmetrical and asymmetrical model. For this purpose, the size of the underground economy was calculated using the MIMIC method, representing an average of 15.2% of Iran’s economy. Then the research model was estimated by linear (symmetric) and non-linear (asymmetric) autoregressive distributed lag. The result indicates that in the symmetrical estimation, the tax is inversely affected by the oil rent, and the increase in the size of the underground economy aggravates this negative relationship. The asymmetric estimate shows that the effect of oil rent on taxation is asymmetric. First, the effect of positive oil rent shocks on taxes is much greater (more than twice) than the effect of negative oil rent shocks. Second, the expansion of the underground economy intensifies the adverse effect of negative oil rent shocks and the positive effect of negative oil rent shocks on taxes. Accordingly, it is suggested that the economic policymaker, regardless of the ups and downs of oil and the resulting rent, should diligently work to improve the efficiency of the tax system, and attempt as much as possible to control and reduce the size of the underground economy.
Type of Study: Research |
Subject:
public economics
Received: Aug 30 2023 | Accepted: Nov 17 2023 | ePublished: Dec 01 2023
Received: Aug 30 2023 | Accepted: Nov 17 2023 | ePublished: Dec 01 2023
References
1. Abbasian, E., & Khatami, T. (2012). Tax Optimal Path Determining to Reduce Government Budget Dependence on Oil Revenues. Quarterly Journal of Quantitative Economics, 9(1), 87-111. [In Farsi] [DOI:10.22055/jqe.2012.10589]
2. Abdelwahed, L. (2020). More Oil, More or Less Taxes? New Evidence on the Impact of Resource Revenue on Domestic Tax Revenue. Resources Policy, 68(1), 101747. [DOI:10.1016/j.resourpol.2020.101747]
3. Ades, A., & Di Tella, R. (1999). Rents, Competition, and Corruption. American Economic Review, 89(4), 982-993. [DOI:10.1257/aer.89.4.982]
4. Anderson, L. (1987). The State in the Middle East and North Africa. Comparative Politics, 20(1), 1-18. [DOI:10.2307/421917]
5. Arabmazar Yazdi, A. (2001). Black Economy in Iran, Its Size, Causes and Effects in the Last Three Decades. Planning and Budgeting, 6(2), 3-60. [In Farsi] [http://jpbud.ir/article-1-768-fa.html]
6. Azami, A., Noferesti, M., & Arabmazar, A. (2022). Investigating the Asymmetric Effects of Factors Affecting Tax Revenues in Iran using Quantile Regression Approach. Quarterly Journal of Quantitative Economics. [In Farsi] [DOI:10.22055/jqe.2022.39481.2451]
7. Bahl, R. (2004). Reaching the Hardest to Tax: Consequences and Possibilities. Contributions to Economic Analysis, 268(1), 337-354. [DOI:10.1016/S0573-8555(04)68817-1]
8. Beblawi, H., & Luciani, G. (2015). The Rentier State. Routledge. [DOI:10.4324/9781315684864]
9. Bornhorst, F., Gupta, S., & Thornton, J. (2009). Natural Resource Endowments and the Domestic Revenue Effort. European Journal of Political Economy, 25(4), 439-446. [DOI:10.1016/j.ejpoleco.2009.01.003]
10. Brown, S. P., & Yücel, M. K. (2002). Energy Prices and Aggregate Economic Activity: An Interpretative Survey. The Quarterly Review of Economics and Finance, 42(2), 193-208. [DOI:10.1016/S1062-9769(02)00138-2]
11. Buehn, A., & Schneider, F. (2012). Shadow Economies around the World: Novel Insights, Accepted Knowledge, and New Estimates. International Tax and Public Finance, 19(1), 139-171. [DOI:10.1007/s10797-011-9187-7]
12. Castro, G. Á., & Camarillo, D. B. R. (2014). Determinants of Tax Revenue in OECD Countries over the Period 2001-2011. Contaduría y administración, 59(3), 35-59. [DOI:10.1016/S0186-1042(14)71265-3]
13. Fathalizade, S., Etefaqfar, F. S., & Kalhor, M. (2022). The Impact of Decreasing Tax Revenues on the Economic Developments of the Second Pahlavi Era (1357-1353). Tahqiqāt-e Târix-e Eqtesâdi Iran (Economic History Studies of Iran), 10(2), 171-190. [In Farsi] [DOI:10.30465/sehs.2021.36516.1713]
14. Frey, B. S., & Weck-Hanneman, H. (1984). The Hidden Economy as an 'unobserved' Variable. European Economic Review, 26(1-2), 33-53. [DOI:10.1016/0014-2921(84)90020-5]
15. Goldberger, A. S. (1972). Maximum-Likelihood Estimation of Regressions Containing Unobservable Independent Variables. International Economic Review, 13(1), 1-15. [DOI:10.2307/2525901]
16. Hamilton, J. D. (1983). Oil and the Macroeconomy since World War II. Journal of Political Economy, 91(2), 228-248. [DOI:10.1086/261140]
17. Ishak, P. W., & Farzanegan, M. R. (2020). The Impact of Declining Oil Rents on Tax Revenues: Does the Shadow Economy Matter? Energy Economics, 92(1), 104925. [DOI:10.1016/j.eneco.2020.104925]
18. Lewis, W. A. (2013). Theory of Economic Growth. Routledge. [DOI:10.4324/9780203709665]
19. Mansouri, M., Khezri, M., Zandi, F., & Safavi, B. (2021). Economic Factors Affecting the Components of Iran Tax Revenue in the Context of Economic Sanctions. Macroeconomics Research Letter, 15(30), 193-209. [In Farsi] [DOI:10.22080/iejm.2021.20149.1812]
20. Mawejje, J. (2019). The Oil Discovery in Uganda's Albertine Region: Local Expectations, Involvement, and Impacts. The Extractive Industries and Society, 6(1), 129-135. [DOI:10.1016/j.exis.2018.09.007]
21. Moore, M. (2007). How does Taxation Affect the Quality of Governance? Institute of Development Studies, Working Paper, No. 280.
22. Mory, J. F. (1993). Oil Prices and Economic Activity: Is the Relationship Symmetric? The Energy Journal, 14(4), 151-161. [DOI:10.5547/ISSN0195-6574-EJ-Vol14-No4-10]
23. Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds Testing Approaches to the Analysis of Level Relationships. Journal of Applied Econometrics, 16(3), 289-326. [DOI:10.1002/jae.616]
24. Reyes-Loya, M. L., & Blanco, L. (2008). Measuring the Importance of Oil-Related Revenues in Total Fiscal Income for Mexico. Energy Economics, 30(5), 2552-2568. [DOI:10.1016/j.eneco.2008.02.001]
25. Rostow, W. W. (2013). The Stages of Economic Growth. In Sociological Worlds (pp. 130-134). Routledge.
26. Sharifzadegan, M. H., & Ghanouni, H. (2017). A Theoretical Analysis and Conceptualization of the Effects of Rentier States on Society's Agency and Structure and Urban Economy of Iran. Urban Economics, 2(1), 1-18. [In Farsi] [DOI:10.22108/ue.2017.79473.0]
27. Shin, Y., Yu, B., & Greenwood-Nimmo, M. (2014). Modelling Asymmetric Cointegration and Dynamic Multipliers in a Nonlinear ARDL Framework. In Festschrift in Honor of Peter Schmidt: Econometric Methods and Applications (pp. 281-314). Springer. [DOI:10.1007/978-1-4899-8008-3_9]
28. Totonchi Malaki, S., Mosavi Jahromi, Y., & Mehrara, M. (2020). Evaluation of the Most Important Factors Affecting the Income of Taxes in the Economy of Iran with the Approach of TVP DMA Models. Journal of Tax Research, 27(44), 71-100. [In Farsi] [DOI:10.29252/taxjournal.27.44.71]
29. Viner, J. (1953). International Trade and Economic Development. Clarendon Press Oxford.
30. Zarra Nezhad, M., Tabae Izadi, A., & Hosseinpour, F. (2014). Measurement and Analysis of Oil Revenues Effect on Tax Revenues in Iran. Iranian Journal of Trade Studies, 18(72), 111-137. [In Farsi]
| Rights and permissions | |
.jpg) |
This work is licensed under a Creative Commons Attribution 4.0 International License. |
