In Iran's economy, taxes are the most important and highest source of government income from public sources in the public budget, so that about two-thirds of the government's general income from the public budget are taxes. The structure of taxes consists of five types of taxes, which are collected in the form of direct taxes and indirect taxes, and its amount is predicted and approved in the annual budget laws. In this article, based on the time series in the last 50 years from 1971-2020, the effect of each type of tax on consumption expenditure has been investigated using the dynamic model Auto-Regressive Distributed Lag (ARDL) in Iran. The results of the research indicate that in the short term, each unit change in the tax on consumption of goods and services and imports reduces the consumption expenditure by -1.38 and -2.9 units with an immediate negative effect. Also, in the short term, each unit of personal income tax will reduce consumption expenses by more than -7 units. However, income tax of legal persons and wealth tax have a positive effect on consumption in both time periods. In addition, gross domestic product and gross fixed capital formation also have a positive effect on consumption and consumer spending in the short and long term,and consumption has a positive effect from the first lag, but it has a negative effect in the second and third lag. In addition, it shows the ecm pattern or error correction coefficient. If in each period moving towards balance is followed by the error of 100, the imbalance error is adjusted to -/26 in the next period and tends to its equilibrium value in a spiral manner by correcting the error.
Mohammad Khanifard, M., Falahati, A., & Fattahi, S. (2025). The effect of tax structure on consumption expenditure in Iran's economy. Public Sector Economics Studies, 4(1), -. doi: 10.22126/pse.2024.9844.1065
MLA
Mojtaba Mohammad Khanifard; Ali Falahati; Shahram Fattahi. "The effect of tax structure on consumption expenditure in Iran's economy". Public Sector Economics Studies, 4, 1, 2025, -. doi: 10.22126/pse.2024.9844.1065
HARVARD
Mohammad Khanifard, M., Falahati, A., Fattahi, S. (2025). 'The effect of tax structure on consumption expenditure in Iran's economy', Public Sector Economics Studies, 4(1), pp. -. doi: 10.22126/pse.2024.9844.1065
VANCOUVER
Mohammad Khanifard, M., Falahati, A., Fattahi, S. The effect of tax structure on consumption expenditure in Iran's economy. Public Sector Economics Studies, 2025; 4(1): -. doi: 10.22126/pse.2024.9844.1065
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