A future-oriented analysis of the impact of tax fairness and complexity on the economic welfare of Iran’s provinces

Document Type : Original Research Articles

Authors

1 Associate Professor, Department of Economic Sciences, Faculty of Social and Behavioral Sciences, Ahlul Bayt International University, Tehran, Iran.

2 Master's degree student, Department of Economic Sciences, Faculty of Economic Sciences, Ahlul Bayt International University, Tehran, Iran.

Abstract

Today, taxation is regarded as one of the vital sources of government revenue. In developing countries, including Iran, the government’s dependence on oil revenues means that tax income constitutes only a minor portion of total revenue. A significant obstacle for governments is tax evasion, which is influenced by various factors such as tax complexity, perceived fairness, and inflation. This research investigates the foresight of tax fairness and complexity on economic welfare in Iran’s provinces from 2011 to 2020, employing a fully modified least squares method. The findings reveal that tax fairness has a significant and positive impact on the economic welfare of Iran’s provinces. Specifically, a one percent increase in tax fairness correlates with a 0.026 percent rise in economic welfare. Conversely, tax complexity exhibits a negative and significant relationship with economic welfare; a one percent increase in tax complexity leads to a 0.024 percent decline in economic welfare. Furthermore, the results indicate that inflation has a negative relationship with economic welfare, while government size and per capita production show a positive and significant relationship with the economic Welfare of Iran’s provinces. Based on these findings, it is advised that the government adopt policies such as simplifying tax laws, lowering tax collection costs, establishing a comprehensive tax system, and reforming the tax framework to enhance the welfare status of Iran's provinces in the future.

Keywords

Main Subjects

References

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Geography and Regional Future Studies
Volume 3, Issue 2 - Serial Number 10
Summer
August 2025
Pages 34-51

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