Modeling of Real Estate Income Tax: System Dynamics Approach

Manochehr Hazrati (), Alireza Bafandeh Zendeh () and Samad Aali ()
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Manochehr Hazrati: Department of Management, Tabriz Branch, Islamic Azad University
Alireza Bafandeh Zendeh: Department of Management, Tabriz Branch, Islamic Azad University
Samad Aali: Department of Management, Tabriz Branch, Islamic Azad University

Journal of Money and Economy, 2020, vol. 15, issue 4, 463-487

Abstract: This study aims to design a model to realize real estate income tax in Tabriz city with due attention to the tax collection process. According to the related literature, the variables of "tax payment," "real estate," "tax evasion," "investment incentive," "rent and real estate speculation," and "advertisement in tax collection" are considered as key variables, affecting the conceptual model of real estate tax system. According to the dynamic systems method, the interaction and relationships between variables are shown by state-flow diagrams based on the literature and experts' opinions. These relationships are finally simulated by Vensim software. The results show that advertisement has a significant effect on the amount of taxes paid by taxpayers. Tax transparency has also reduced rents for taxpayers and ultimately reduced tax evasion and timely tax collection in the estimated budget of real estate resources and single-occupancy jobs. Scenarios show that lowering the tax rate in the trading and business market and large corporations and businesses' rental income are strongly influenced by tax revenues.

Keywords: Real Estate Income Tax; Income Tax Jobs; System Dynamics; Economic Rent; Speculation (search for similar items in EconPapers)
JEL-codes: N12 N25 O42 P43 P44 (search for similar items in EconPapers)
Date: 2020
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