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Dissection of the Tax Reform of the Country: Challenges, Programs and the Tax System Operation
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Ali Askari *   |
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Abstract: (21728 Views) |
| Tax system development is regarded as a fundamental area of the Iranian economic development. In this respect, substitution of tax revenues for unsustainable ever-changing oil revenues has always been a major area of the country’s economic and social development plans. This is what one may feel more significantly than ever bearing in mind the 5th Development Plan’s obligation for independence of the state’s current expenditures from oil and gas export revenues, achieving a T/GDP ratio of %10 and an annual %10 growth of public revenues to cost credits (excluding oil and gas export revenues) taking into account circumstances resulting from economic sanctions against Iran. In spite of efforts made for the development of the country’s tax system during recent years, there still remain so many challenges. Having in mind three pillar components of a tax system namely, “national production”, “tax laws and regulations”, and the “organization in charge of taxation”, one may mention the following as major barriers and challenges ahead of the Iranian National Tax Administration (INTA): The asymmetrical combination of the Iranian national production, a large volume of the services sector, the way incomes are distributed throughout the country, existence of a large underground economy, existence of public institutions with high turnovers, complexity of tax laws and regulations, weakness of tax laws enforcement guarantees, narrowness of tax bases, broadness of tax exemptions, low efficiency of certain tax incentives, shortage of skilled human resources and insufficient fund resources, lack of an integrated approach to taxpayers, and infidelity of guild :::union:::s to their legal and professional obligations. There is no doubt that it will be impossible to develop the country’s tax system without simultaneous reinforcement of the mentioned-above pillar components. The present paper aims at studying the most important measures already taken for the development of the Iranian tax system along with measures to be taken in future following a review of the functions of taxes in the country and the challenges ahead of the country’s tax system having in mind the three pillar components mentioned above. The introduction and development of the VAT system, revision of tax laws and regulations, implementation of TARA (Tax Automation and Revenue Administration) Project, and HRD reforms are among major areas followed for changing and developing the country’s tax system. But as for measures to be taken in future for the development of the country’s tax system, one may refer to the reform of the country’s overall macroeconomic structure in terms of the way economic activities are done, development of corporate activities, qualitative development (modernization) of the services sector, broadening tax bases, elimination of redundant tax exemptions, resolving INTA’s budget restrictions, provision of human resources, as well as taking all legal, administrative and judicial measures required for combating underground economy. |
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| Keywords: Tax System, Tax Functions, Pillar Components of Tax System, TATA Project, Enforcement Guarantees. |
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Full-Text [PDF 6678 kb]
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Type of Study: Research |
Subject:
General
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