Testing the asymmetric effects of tax burden and production on Iran's tax evasion using NARDL nonlinear model

Subject Areas : Financial Economics

teimour mohamadi ^{1 *} , Amin Fooladvand ^{2 *} , narsis amin rashti ³

1 - Professor, Allameh Tabatabai University, Tehran, Iran
2 - Department of Economics, Central Tehran Branch, Islamic Azad University, Tehran, Iran
3 - Member of the Faculty of Central Tehran

Received: 2023-11-28 Accepted : 2024-11-27 Published : 2025-01-05

Keywords: Tax burden, production, tax fraud, NARDL nonlinear model,

Abstract :

High tax rates and tax burden are one of the most important causes of tax evasion. In addition, the tax burden caused by the increase in the tax rate leads to an increase in the activity in the underground economy sector, which in turn will increase tax evasion. Studies show that the amount of tax evasion in Iran is high and tax is one of the important and influencing factors. Based on this, the present article investigates the asymmetric effects of tax burden and production on Iran's tax evasion using the NARDL nonlinear model for the years 2014-2014. To calculate the amount of tax evasion, Tanzi's money demand method is used, which according to the estimation results of the model, with the increase of real per capita income and interest rate, the ratio of money volume to liquidity increases. Also, the asymmetric positive and negative effects of the tax burden have also led to a decrease in the ratio of money volume to liquidity. Therefore, to solve the problem of tax evasion in Iran, one of the most important solutions is the growth and development of the production sector.