Authors
1 Agricultural Bank Economic Expert
2 Professor of Economics, Shahid Beheshti University
3 Assistant Professor of Economics, Shahid Beheshti University
Abstract
A model of Islamic taxes is developed in this study and then the performance of present Iranian corporate tax system is tested against it. The estimated income tax elasticity, results and analysis of variance of corporate taxes in alternative groups show that present taxing practices are at variance with the Islamic tax model implications. The results are obtained from a survey of 10108 corporate tax files submitted to the Tax Department in the year 1373 (1994). To obtain tax efficiency and equity, which are the goals of the Islamic tax model, a new system of corporate taxing were proposed to be adopted, given that the government’s tax income would not decline. The simulation results of the new system show that both higher efficiency and equity standards are obtained and government income tax receipts are not curtailed.
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