Measuring Potential Value Added Tax Capacity in Iran Using Multiregional Input-Output Model

Document Type : Research Paper

Author

Faculty of Economics, Allameh Tabataba’i University, Tehran, Iran.

10.22099/ijes.2020.37396.1677

Abstract

The main aim of the present paper is to measure the potential value-added tax (VAT) capacity in Iran using the multiregional input-output model (MIOM) to answer the following question: “how much indirect value-added tax is potentially generated in one region in order to satisfy the production of other regions?” Applying Leontief’s final demand-to-output is not suitable and therefore, Pasinetti’s parsimonious production-to-production approach is utilized. For this purpose, we have used a MIOM covering 9 regions for the year 2016. Based on the existing conventional regional theory, we expect that larger regions have a tendency to contribute more value-added to other regions. Surprisingly, the overall results confirm the prevailing theory as follows: for example, region 6 (the largest region) generates 5.3% of the total value added of region 1, whereas region 7 (the smallest region) is responsible for 1.7% of the total value added of region 1. Similar results have been found on the impact of regions 6 and 7 on the added value of other regions. In addition, based on the logic of VAT system, it is expected that a larger region has a higher impact on VAT capacity in other regions. The overall findings relatively confirm the theoretical prediction as follows: the impact of region 6 on VAT capacity of other regions is 4-12 times more than the impact of the smallest region on the potential VAT capacity of other regions.

Keywords


Article Title [فارسی]

سنجش ظرفیت بالقوه مالیات بر ارزش افزوده در ایران با استفاده از الگوی داده-ستانده چندمنطقه ای

Author [فارسی]

  • پریسا مهاجری
دانشکده اقتصاد، دانشگاه علامه طباطبائی، تهران، ایران.