Goods and services tax on inflation in the Iranian economy

Document Type : Original Article

Authors

1 Economic

2 ECONOMIC

Abstract

VGoods and services tax has attracted the attention of many countries due to the consumption of the tax base, low identification costs, easy access, no inefficiency in the production sector and no pressure on this sector. Despite the benefits, the main challenge of receiving taxes on the sale of goods and services is the effects of possible inflation of the implementation of these types of taxes. Therefore, in this research, it has been tried to investigate and study the effect of tax on the sale of goods and services on inflation. For this purpose, were used the data of the years 1978-2020 the ARDL and ECM methods. Based on the obtained results, the tax with a break led to an increase in inflation and its effect was about 0.05%. In fact, the imposition of goods and services tax has acted through cost pressure and has caused an increase in the price level. However, its effect on the increase in inflation has been small compared to other investigated variables. According to the obtained results, the most anti-inflationary effect was related to the production variable, followed by the interest rate. And liquidity has shown the greatest impact on inflation. In addition, exchange rate variables and economic sanctions have also led to an increase in inflation during the investigated period.Goods and services tax has attracted the attention of many countries due to the consumption of the tax base, low identification costs, easy access, no inefficiency in the production sector and no pressure on this sector. Despite the benefits, the main challenge of receiving taxes on the sale of goods and services is the effects of possible inflation of the implementation of these types of taxes. Therefore, in this research, it has been tried to investigate and study the effect of tax on the sale of goods and services on inflation. For this purpose, were used the data of the years 1978-2020 the ARDL

Keywords

References

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Public Sector Economics Studies
Volume 2, Issue 3 - Serial Number 5
December 2023
Pages 293-312

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History

  • Receive Date: 09 September 2023
  • Revise Date: 09 December 2023
  • Accept Date: 10 December 2023

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