Monitoring Expenditures on Tax Collection and Tax Evasion: The Case of Iran

Ali Hussein Samadi () and Shohreh Nasirabadi ()
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Ali Hussein Samadi: Department of Economics, Faculty of Economics, Management and Social Sciences, Shiraz University, Shiraz, Iran.
Shohreh Nasirabadi: Department of Economics, Faculty of Economics, Management and Social Sciences, Shiraz University, Shiraz, Iran.

Iranian Economic Review (IER), 2019, vol. 23, issue 1, 149-161

Abstract: The main aim of this paper is analyzing the relationship between tax evasion and the monitoring expenditure on tax collection in Iran. For doing so, we have used a simulation model for determining optimal level of monitoring expenses on tax collection. The results showed that, a greater portion of government expenses must be allocated to monitor the tax collection, although do this reduces tax evasion, but have a negative effect on economic growth. Thus, instead of increasing monitoring expenses in line with reducing tax evasion, it is better to reduct taxes rate in a way that in addition not to decrease in motivation of economic agents activity, it also decreases motivation for tax evasion.

Keywords: Tax Evasion; Tax Rate; Monitoring Expenditure on Tax Collection; Economic Growth; Iran. (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:eut:journl:v:23:y:2019:i:1:p:149

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