Open AccessAn Estimation of Tax Evasion in Iran
Author(s) -
Saeed Karimi Petanlar,
Ahmad Jafari Samimi,
Alireza Aminkhaki
Publication year - 2011
Publication title -
journal of economics and behavioral studies
Language(s) - English
Resource type - Journals
ISSN - 2220-6140
DOI - 10.22610/jebs.v3i1.250
Subject(s) - tax evasion , economics , gross domestic product , evasion (ethics) , estimation , currency , indirect tax , value added tax , tax credit , monetary economics , tax reform , economy , macroeconomics , public economics , immune system , management , biology , immunology
The aim of this research is to estimate the size of tax evasion between 1971 and 2007 in Iran. Among the present direct and indirect approaches, the indirect approach presented by Tanzi based on currency demand, is used to estimate the size of the underground economy, then taking the effective tax rate into consideration, the amount of the underground economy taxes. Our results show that the size of the underground economy is increasing in a long-term trend and also the ratio of the underground economy to gross domestic product has increased during the period under consideration. Our findings also indicate that tax evasion has markedly increased during the period. Therefore, policies to alleviate the tax evasion in the country should be implemented by policy makers.