Investigating the Factors Affecting the Tax Coverage Index in Iran with an Emphasis on Oil Revenues

The share of tax revenues in providing the government's current expenses which is known as the tax coverage index, has always been one of the important indicators for evaluating the performance of the country's tax system, which can play an effective role in the country's economy at the macro level. Experience has shown that financing a large part of current expenses through unstable oil revenues in Iran, in the conditions of sanctions or the fluctuation of global oil prices, the government faces a basic challenge such as a budget deficit. Therefore, the need to cover the government's current expenses through tax revenues becomes increasingly apparent. Therefore, in this research, the effect of the effective factors on the share of tax revenues in financing the government's current expenses is investigated using the Autoregressive Distributed Lag in the time period of 1980-2021. The results show that the ratio of the government budget deficit to current expenses has a positive and significant effect, and the share of oil revenues in providing the current expenses of the government, the share of added value of the agricultural sector in the GDP and the degree of openness of the economy have a negative and significant effect on the tax coverage index. Also, the special conditions related to the years of imposed war have also had a negative effect on the amount of the mentioned index.