Document Type : Research Paper
Authors
1 دکتری اقتصاد دانشگاه ارومیه
2 PhD student in Economics, Urmia University
Abstract
he aim of this study is to investigate the effect of financial inclusion on tax revenue in Iran during the period 1979–2021 using the new “quantile within quantile wavelet” method; an approach that allows analyzing the relationship between variables at different levels of distribution and in short-term, medium-term, and long-term time horizons. For this purpose, tax revenue is considered as the dependent variable and financial inclusion, inflation, trade openness, GDP and urbanization are considered as explanatory variables. Preliminary tests including BDS test and Q-Q diagrams showed that the time series have nonlinear behavior and asymmetric distributions; which makes the use of wavelet quantile methods necessary. Empirical findings indicate that the effect of financial inclusion on tax revenue in Iran is heterogeneous in different time horizons: in the short term, this effect is limited and depends on the level of financial inclusion; In the medium term, with increased access to financial services and information transparency, a positive and significant effect appears; and in the long term, financial inclusion sustainably increases tax revenue. The effect of other variables also shows a dynamic and distribution-dependent behavior: inflation has a negative effect in the short term but is moderated at higher horizons;and urbanization also expands the tax base in the long term. Overall, the results of the study show that the development of financial inclusion, along with institutional reforms and the digitalization of the tax system, can be considered by policymakers as one of the key tools for stabilizing tax revenues in Iran.
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