Investigating and identifying Obstacles to The Integration of Social Assistance System and Tax System in Iran Based on Refundable Tax Credit.

Document Type : Original Article

Authors

1 , Imam Sadiq University, Tehran, Iran.

2 Faculty of Economics, Imam Sadiq University, Tehran, Iran.

3 , Faculty of Economics, Imam Sadiq University, Tehran, Iran.

Abstract

The social welfare system and the tax system, due to their redistributive role, have an important place in the issue of social justice and are one of the pillars of the movement towards a social and economic system based on justice. In Iran, based on the teachings of the Islamic Revolution, social protection policies have always been part of the concern of the governing system, but still, the current state of the support system and inequality indicators in the country are far from the desired point..The implementation of the personal income tax system and its connection with the welfare system in the form of a comprehensive social assistance model such as a refundable tax credit can significantly help to reduce inequalities and improve poverty indicators in the society. The main issue of this research is to investigate and identify the obstacles to consolidation and integration of the social assistance system and the tax system based on the Refundable Tax Credit (RTC) scheme. For this purpose, the required qualitative data was collected through semi-structured interviews with experts, and then, thematic analysis method was used to analyze, evaluate and classify the collected information. The findings show that there are several challenges for the implementation of an integrated support-tax system based on a refundable tax credit, which is the implementation of the personal income tax system, annual accounting period, the lack of complete information on income and expenses, especially for the poor, the lack of information provided by the governing entities, the unwillingness of the social assistance institutions for consolidation and integration, inertia in the country's tax and executive system, technical and operational complexities, and finally the weakness of the tax culture are the most important. The policy recommendation of this research includes the formation of the governance of Iran's social assistance system based on refundable tax credit and the creation of coordinated and aligned procedures and processes between the social assistance system and the tax system under the supervision of a sovereign trustee institution. Of course, there are technical and structural obstacles and challenges for the establishment of such a system, and the requirement of implementing an integrated support and tax system is to remove these obstacles as much as possible and meet its requirements and prerequisites.

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Main Subjects

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Public Sector Economics Studies
Volume 3, Issue 3 - Serial Number 9
October 2024
Pages 355-384

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History

  • Receive Date: 23 January 2024
  • Revise Date: 06 May 2024
  • Accept Date: 07 May 2024

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