The Investigation of Value Added Tax on Fluctuations in State Tax Revenues

Mohamma dreza Sharafipour, Houshang Amiri, Zahra Lashgari

Abstract


Because of the broadness in tax bases, Value Added Tax (VAT) is amongst taxes which have a high income for governments and service distribution for people welfare. In our country, VAT was enforced in order to reform the tax structure and to increase the government income. Hence, the purpose of this study is to investigate the effect of VAT on fluctuations in state tax revenues. Using econometric techniques in the form of panel data, statistical data of years 2008-2013 are evaluated in this paper. Multiple linear regression is used in this study. Findings show that more than half of the tax revenues’ fluctuations are explained through the VAT growth variable. In the investigation of coefficients’ significance, results indicate that the positive and significant effect of the VAT growth, is in both legal and real persons so that the increase in VAT growth in legal and real persons will be 6.8% and 4.5%, respectively. Generally, research findings confirm the considered assumptions, and there is a significant positive correlation between the growth rate of VAT and tax revenues’ fluctuations.

 


Keywords


Value Added Tax, Tax Revenues’ Fluctuations, Panel Data, Econometrics

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