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Since the way by which the 2nd phase of Subsidies Targeting Plan is to be implemented, the levels of liberalization of the prices of energy carriers and the shares of different sectors in the total subsidies are not clear yet, and also due to the lack of up-to-date macroeconomic statistics required to study the immediate and short-run effects of the plan on Iranian tax revenues, in this article we have employed Vector Autoregressive Model (VAR) to answer the research question. At the same time, for the purpose of analyzing the dynamic interactional effects of the shocks created, we have resorted to the Forecast Error Variance Decomposition Functions (FECDs), as well as the Impulse Response Functions methods for the period 1987-2012. The results obtained from the Impulse Response Functions Method indicate that in general, the elimination or decrease of subsidies (i.e. targeting subsidies) would lead to a decrease in tax revenues. Moreover, as for the tax sub-parts, the results of the model show that the direct taxes in fixed prices would be decreased upon the implementation of the Plan. On the other hand, the effect of a decrease in the amount of subsidies paid has led to an increase in the indirect taxes as equal to one unit of standard deviation in the first period while it is assumed to result in a decrease of indirect taxes in the second period and is expected to be eventually neutralized in subsequent periods

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Generally in all countries, governments must intervene in some areas inevitably, regardless of sovereignty and tenure. Some of these areas are social welfare and particularly expanding protection of vulnerable groups for reducing income inequality and improving social income distribution. In this paper, the impact of some of the macroeconomic variables on income inequality has been studied using co Integration approach during years of 1349-91. The results show that achieving fifth development plan goals such as 8 percent economic growth rate and Gini coefficient of 35% and other income distribution indicators is not possible simultaneously. Thus in setting sixth economic plan, it should be considered that achieving high growth as well as low Gini coefficient will be difficult. We show that rising per capita GDP and inflation increases income gap and rising per capita subsidy and employment and per capita wealth tax, decreases income gap.

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Poverty and inequality as a social harm if not to be controled and limmited, can lead to extensive damage in the household and community levels, so economic , social and ethical life of society would be threatened. Iranian society, like other societies suffers from this condition. Thus, cosidering income inequality and analyzing the distributional effects of its policies is very important to promote economic growth. In this study, the raw data of household expenditure and income compared poverty status and inequality in rural and urban areas during the years before and after the implementation of the law of targeted cash subsidies. Using STATApoverty census index, the gap and severity of poverty and gini coefficient are measured. The results indicate that during the period 1381 to 1388 (before targeted cash subsidies law implement)levels of poverty and income inequalitywere high and had volatility. Poverty and income inequality in 1390 and 1391 compared to 1389 (the year the law enforcement targeted cash subsidies) in both rural and urban areas reduced.

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Iran is not only a major energy leading oil producer, but also is a large consumer of energy. High population, land area and industrial and urban development are all important factors in the consumer market in the country, and it is natural that a vast country like Iran has the energy demand for a variety of purposes. This is the reason that the level of energy consumption in Iran is very high and for various, reasons should be concerned about the current situation. Before the targeted subsidy plan, Iran's approach in the energy subsidies was very unsuitable and harmful. It seems necessary to evaluate the effect of the plan on the consumer demand for energy across the country. In this study, we examine this relationship in Isfahan. This paper uses a model which introduced by Sitra and et al (2012). The demand elasticity is calculated with using the SUR method and AIDS. In this regard, we use data of Isfahan’s consumers for the period of 1384 to September 1393. The estimation results of gasoline demand equation show that the effect of commodity prices on demand is negative, which indicates the law of demand works here. The estimated coefficient of commodity price is negative and smaller than one that shows gasoline is an essential commodity. In accordance with the results, the coefficient of real value added is estimated positive, which indicate the gasoline is a normal good. The results also show that the dummy variable for the targeted subsidy plan has a negative and significant effect on the commodity demands which can indicate that the plan and prices lead to lower fuel demand in the city.
 
 

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The subsidy is one of the most important economic tools and the government’s supportive policies for the protection of low-income groups. The inefficiency of the subsidy distribution puts a heavy cost burden on the government and also create injustice. Subsidies are aimed to achieve social justice, welfare, and fair income distribution. Therefore, the necessity of paying subsidies and support for low-income groups is obvious, but the problem is that how we should allocate the subsidy. Since decision making is related to the mind and human knowledge more than other factors, in this paper, a fuzzy multi-criteria decision model is used for selecting the most suitable method for allocating the subsidies. The results show that despite the disadvantage of the cash subsidy system, it has higher utility rather than the subsidized commodities plan, coupons system, and subsidized prices. Although, the utility of the subsidized commodities plan and the utility of the coupons system are very close together. But subsidized prices plan is lower than the three other options.