Tax Delay and Tax Complexity; Evidence of Corporate Taxation in Iran

Document Type : Research Paper

Authors

1 Ph.D. Candidate in Economics, Ferdowsi University of Mashhad

2 Assistant Professor of Economics, Ferdowsi University of Mashhad

Abstract

A delay in finalizing a company's tax file causes a decrease in the real value of the government's tax revenues, an increase in the cost of tax collection, and the destruction of the business environment for companies. Therefore, in this article, the factors influencing this delay were investigated by using the data of 45 companies from the three petrochemical, chemical and food industries of Iran and analyzing their tax files during the financial years of 2015 to 2015 using the combined data regression method. The results show that 62% of the cases were decided in authorities outside the tax organization and the average time for the companies' tax cases to be decided was more than 4 years. The results show that the size of the company, tax complexity, the difference in the diagnostic-expressive tax rate and the change in the tax laws have a positive and significant effect on the delay in the finalization of the tax in all companies, but the results are somewhat different in the petrochemical industry, chemical industry and food industry

Keywords

Main Subjects

References

  1. Abdoli, M. R., Boojari, M., & Shahhosseini, M. (2014). Investigating the Expectations Gap Between Taxpayers and Tax Dispute Resolution Boards Regarding Factors Affecting Tax Noncompliance and Disputable Issues, and Their Ranking Using Analytic Hierarchy Process (AHP) Analysis. The 9th Conference on Financial and Tax Policies in Iran (in Persian).
  2. Abdoli, M. R., Dehdar, F., & Bakhshi, H. (2012). A Study on Evaluating the Informational Content of Factors Affecting Tax Policies of Companies Listed on the Tehran Stock Exchange. Master's Thesis at Islamic Azad University, Shahroud Branch, Faculty of Humanities (in Persian).
  3. Atwood, T. J., Drake, M. S., & Myers, L. A. (2010). Book-tax conformity, earnings persistence and the association between earnings and future cash flows. Journal of Accounting and Economics, 50(1), 111-125.‏
  4. Atwood, T. J., Drake, M. S., & Myers, L. A. (2010). Book-tax conformity, earnings persistence and the association between earnings and future cash flows. Journal of Accounting and Economics, 50(1), 111-125.‏
  5. Azadpour, S., Al-Tjaei, E., & Baseri, B. (2017). The effect of tax complexity on economic growth in a group of developed countries. Tax research paper, 26(40), 43-63 (in Persian).
  6. Azizi, A., V, A., & Kasbi, F. (2016). Investigating the economic and non-economic elements affecting taxpayers' tax assessment. The second annual conference on economics, management and accounting, Ahvaz - Shahid Chamran University, Ahvaz, Shahid Chamran University - Khuzestan Industry, Mining and Trade Organization (in Persian).
  7. Boynton, C. E., Dobbins, P. S., & Plesko, G. A. (1992). Earnings management and the corporate alternative minimum tax. Journal of Accounting Research, 30, 131-153.‏
  8. Brink, W. D., & Porcano, T. M. (2016). The impact of culture and economic structure on tax morale and tax evasion: A country-level analysis using SEM. In Advances in taxation (Vol. 23, pp. 87-123). Emerald Group Publishing Limited.‏
  9. Brown, R. E., & Mazur, M. J. (2003). IRS's comprehensive approach to compliance measurement. National tax journal, 56(3), 689-700.‏
  10. Bushman, R. M., & Piotroski, J. D. (2006). Financial reporting incentives for conservative accounting: The influence of legal and political institutions. Journal of accounting and economics, 42(1-2), 107-148.‏
  11. Nabavi Chashmi, S. A., & Barzegarnehamtan, N. (2018). Investigating and Assessing the Factors Influencing the Creation of Tax Gaps in the Iranian Tax System (A Case Study of the General Directorate of Tax Affairs in Mazandaran Province). Tax Research Journal, 26(39),47-69 (in Persian).
  12. Choudhry, M. N. N. (1990). Fiscal revenue and inflationary finance. International Monetary Fund.‏
  13. Cardoso, E. (1998). Virtual deficits and the Patinkin effect. Staff papers, 45(4), 619-646.‏
  14. Kondo, N. (2017). Islamic law and society in Iran: A social history of qajar Tehran. Taylor & Francis.‏
  15. Gebauer, A., Nam, C. W., & Parsche, R. (2007). Can reform models of value added taxation stop the VAT evasion and revenue shortfalls in the EU?. Journal of Economic Policy Reform, 10(1), 1-13.‏
  16. Amin Khaki, A. (2010). Estimation of tax evasion and its determinants in Iran's economy. thesis of Mazandaran University (in Persian).
  17. Gobena, L. B., & Van Dijke, M. (2017). Fear and caring: Procedural justice, trust, and collective identification as antecedents of voluntary tax compliance. Journal of Economic Psychology, 62, 1-16.‏
  18. Guedhami, O., Pittman, J. A., & Saffar, W. (2014). Auditor choice in politically connected firms. Journal of accounting research, 52(1), 107-162.‏
  19. Kirchler, E., Hoelzl, E., & Wahl, I. (2008). Enforced versus voluntary tax compliance: The “slippery slope” framework. Journal of Economic psychology, 29(2), 210-225.‏
  20. Laffer, A. B., Winegarden, W. H., & Childs, J. (2011). The economic burden caused by tax code complexity. The Laffer Center for Supply-Side Economics, 1-24.‏
  21. Masihi, M., & Mohammad Nejad Aali Zami, A. (2014). Investigating the factors affecting the tax culture from the point of view of taxpayers and tax experts of the General Directorate of Value Added Tax in Tehran. Cultural Management, 1 (27), 29-45 (in Persian).
  22. Nazari, Sh. (2014). Estimation of tax collection gap of legal entities and price elasticity of direct taxes. The 9th conference of financial and tax policies of Iran. 33 (81), 117-147 (in Persian).
  23. Pourzamani, Z., & Shamsi Jamkhaneh, A. Q. (2008). Investigating the Reasons for the Discrepancy Between Declarative Taxable Income of Commercial Companies and the Taxable Income Recognized by Tax Units (A Case Study of the General Directorate of Tax Affairs in Western Tehran). Tax Research Journal, 17(5), 9-26 (in Persian).
  24. Saad, N. (2014). Tax knowledge, tax complexity and tax compliance: Taxpayers’ view. Procedia-Social and Behavioral Sciences, 109, 1069-1075.‏
  25. Salamon, L. M., & Siegfried, J. J. (1977). Economic power and political influence: The impact of industry structure on public policy. American Political Science Review, 71(3), 1026-1043.‏
  26. Shakery, A., & Moosavi, Mirhossein. (2002). Assessing the Efficiency of the Tax System in the Iranian Economy Considering Price Elasticity and Tax Collection Gap. Iranian Economic Research,17, 57-78 (in Persian).
  27. Tanzi, V. (1978). Inflation, Real Tax Revenue, and the Case for Inflationary Finance: Theory with an Application to Argentina (Inflation, recettes fiscales réelles et avantages du financement inflationniste: théorie et application au cas de l'Argentine)(Inflación, ingreso tributario real y financiamiento inflacionario: Teoría y aplicación al caso de Argentina). Staff Papers-International Monetary Fund, 417-451.‏
  28. Tehrani, R., Salehi, M., Valipour, H., & Lashky, M. J. (2011). The survey of the political costs and firm size: case from Iran. Operations Management: A Modern Approach, 57.‏
  29. Tohidi, A. R., & Ghaderi, S. T. D. (2014). Causes of Prolonged Litigation in the Iranian Tax System and Its Control Strategies. The 8th Conference on Financial and Tax Policies in Iran, Tax Group, Qom (in Persian).
  30. Wu, L., Wang, Y., Luo, W., & Gillis, P. (2012). State ownership, tax status and size effect of effective tax rate in China. Accounting and Business Research, 42(2), 97-114.‏
  31. Zamani, A, & Kalantari, M. (1998). Measurement of Legal Taxation Gaps and Their Negative Effects in Iran. Economic Research and Policies, 11, 67-87 (in Persian).
  32. Zimmerman, J. L. (1983). Taxes and firm size. Journal of accounting and economics, 5, 119-149
Quarterly Journal of Applied Theories of Economics
Volume 10, Issue 3 - Serial Number 38
December 2023
Pages 201-226

Files

Share

How to cite

Statistics