Younes Teymouri
Mohammad Javad Mohseninia
Abstract
The main consider in this study is the subject of tax exemptions. Exemptions in the economic literature are considered as part of tax expenditures in the government budget. The purpose of this study is to identify exemptions, analyze the consequences and estimate their revenue capacity in the budget. What is referenced in identifying exemptions is the Benchmark Tax System, which is based on public tax policies in society. Considering the structure and public policies of several representative countries (USA, Britain, Sweden and Germany) along with Iran, It was concluded that the tax structure of countries derives from mechanisms formed within society such as institutional- political and social structure. Comparison of countries shows us that the tax structure of Iran is very similar to the structure of the United States, The most important feature of which is being particularistic and having high tax expenditures, including widespread exemptions. In addition, The fragmentation of tax decision- making among Iran’s tax policymakers is one of the reasons that without going into details of explaining the Benchmark Tax System, leads us to accept the fact that a large part of exemptions deviate from Benchmark Tax System and they are part of the tax expenditures of the government budget.
Identifying and classifying tax exemptions-that now viewed as tax expenditures- based on economic sectors, shows that these exemptions are widespread, vague, particularistic, inefficient and discriminatory. Such unfavorable characteristics have negative and profound consequences in both macro and sectoral levels for the country’s economy. Inefficiency and discrimination have penetrated even at the sectoral level, And in particular the manufacturing sector of the industry in comparison with services sector has suffered seriously. Losing of part of financing resources in government budget as a result of granting exemptions is another part of the damage of privileges. Estimating the amount of potential revenues by taking into account some important tax exemptions, shows that value of the tax capacity of these exemptions is about 80 thousand billion Tomans, which covers approximately 18 percents of the deficit in the operational balance of the government approved budget in 1400.
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