Abstract
In this study, the tax capacity and effort and its relationship with oil revenue of 6 selected countries member in OPEC such as Iran, Kuwait, United Arab Emirates, Venezuela, Algeria and Saudi Arabia are considered. The study has been applied by panel data within 1990-2008. According to the results of Husman test, fixed effects method was confirmed for estimation of panel data. Therefore, tax capacity model was compiled and estimated via fixed effects method. The variables affecting the tax capacity including per capita income, open economics (import and export ratio to the gross domestic product) and oil revenue ratio to gross domestic product and tax capacity with one lag were considered. The summary of the analysis indicated that the relationship between the per capita income, oil revenue to gross domestic product ratio and tax capacity with one lag and dependent variable is positive and significant. Whilst the open economics grade in the oil countries has negative and significant relationship with the tax capacity. At the next stage, the tax effort was computed for the studied countries according to the results of tax capacity model estimation. The results of this study indicated that the tax effort in Iran is placed in lower ranks than Venezuela, Algeria and with a inconsiderable difference to Saudi Arabia in the fourth rank out of six studied countries.
Highlights
The taxes are considered as the most common and important resource for supplying the public revenues and one of the most efficient and effective financial policy tools by means of which the government may provide many of social and welfare services to the people and orientate the socioeconomic currents and activities in their proper direction
At first, upon establishing a model, the factors affecting tax capacity are assessed by econometrics and after finding the passive factor that is the tax capacity, the tax efforts of several countries member o OPEC is computed and the relationship between tax effort of some OPEC countries including Iran, Algeria, Venezuela, United Arab Emirates, Kuwait and Saudi Arabia within 1990-2008 and the oil revenues of those countries are studied in order to specify that how the oil revenue changes will vary the tax effort in such countries
The variables including per capita income, open economics, oil revenue and tax capacity with one lag
Summary
The taxes are considered as the most common and important resource for supplying the public revenues and one of the most efficient and effective financial policy tools by means of which the government may provide many of social and welfare services to the people and orientate the socioeconomic currents and activities in their proper direction. The tax capacity provides the required information on state economic power in mobilizing the tax resources for responding the financial problems and execution of economic policies. One of the most important necessities based on its ground the extant paper has been prepared, is determining the state potential tax capacity and appropriate measures for enhancing the actual tax collections and reducing the gaps between actual collections and potential tax capacity. At first, upon establishing a model, the factors affecting tax capacity are assessed by econometrics and after finding the passive factor that is the tax capacity, the tax efforts of several countries member o OPEC is computed and the relationship between tax effort of some OPEC countries including Iran, Algeria, Venezuela, United Arab Emirates, Kuwait and Saudi Arabia within 1990-2008 and the oil revenues of those countries are studied in order to specify that how the oil revenue changes will vary the tax effort in such countries
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