Assessing Tax Evasion Methods in Free-Trade Zones

Subject Areas : Computational economics

javad ghanbari nejad ¹ , mehdi salehi ² , ahmad pifeh ³

1 - Accounting Department, Zahedan Branch, Islamic Azad University, Zahedan, Iran
2 - Department of Accounting, Ferdowsi University, Mashhad, Iran
3 - Department of Accounting, University of Sistan and Baluchistan, Zahedan, Iran

Received: 2023-10-10 Accepted : 2024-01-16 Published : 2023-11-22

Keywords: Cultural Factors, , , , economic factors, , political factors, , tax compliance, , tax evasion,

Abstract :

AbstractPurpose: This paper aims to assess different tax evasion methods in the free-trade zones of Iran. In other words, this paper seeks to answer the question of “whether the cultural, economic, and political factors, tax compliance, tax evasion, and tax rates (tax fairness) can cause tax evasion in free trade zones of Iran or not”.Design/methodology/approach: The study method is practical in terms of the objective and descriptive survey based on the method. The study's statistical population comprises all employees and experts of the customs office and Tax Affairs Administration of the free-trade zones, including 480 employees of the tax administration and 400 employees of the customs office using the Cochran Sampling method as the sample of the study. This paper uses the PLS tests to assess the effect of independent variables on the dependent ones.Findings: The study results show that the cultural, economic, and political factors, tax compliance, tax evasion, and tax rates (tax fairness) have a positive and significant effect on tax evasion and tax avoidance in the free-trade zones of Iran.Originality/value: Since no study has been carried out so far on different tax evasion methods in the free-trade zones of Iran, results can provide users with helpful information and contribute to the development of science and knowledge. Practitioners can give beneficial information since this paper was carried out in Iran with peculiar political-economic conditions (severe economic sanctions, highly intensive inflation, and eight years of imposed war).