Studying the effect of uncertainty in oil revenues and exchange rate on the absorption of Iranian tax revenues

Mostafa Shokri ¹ ( Associate Professor, Department of Economics, Faculty of Management and Economics, Lorestan University, Khorramabad, Iran (Crossponding Authur), [e-mail] )
Masoud  Saadatmehr ² ( Assistant Professor, Department of Economics, Payame Noor University, Tehran, Iran. [e-mail] )

Submited date : 2025-08-10 Accepted date : 2025-10-28

Keywords: Tax, oil revenue uncertainty, exchange rate uncertainty, fuzzy logic,

Abstract :

Uncertainty in oil revenues and exchange rate are among the most important challenges of the Iranian economy that have also caused instability in other macroeconomic variables. One of the most important effects of this uncertainty is the impact on the volume of government tax revenues, which is very important for a country like Iran that is planning to rely on tax revenues. Understanding this importance, the aim of this study is to study the effect of uncertainty in oil revenues and exchange rate on the absorption of Iranian tax revenues during the period 1991-2023. For this purpose, first, the GARCH method was used to estimate uncertainty in oil revenues and uncertainty in the real effective exchange rate, and then the fuzzy regression method was used to examine the correlation between the variables. The results showed that the uncertainty variable of oil revenues with a fuzzy ratio  (-0.1670, 0.0039) has a negative effect on the absorption of tax revenues. This fuzzy coefficient confirms that uncertainty in oil sales, as one of the most important challenges for oil-dependent economies such as Iran, has a wide impact on tax revenues. The model estimation results also show that currency uncertainty targets corporate profitability and investment by creating an unpredictable business environment, which also directly affects the government's tax revenue collection.

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