The effect of macroeconomic variables on government tax revenue in Iran

One of the most important components of government revenue, which is highly anticipated and unrealized, is the government's budget deficit. Government tax revenues may be influenced by macroeconomic variables and consequently reduce the government budget. Therefore, the present study investigates the effect of macroeconomic variables on tax revenue of Iran. This is done using annual data for the period 1979-2018. Analyzes were performed by ARDL method. The results showed that the variables of per capita output without oil, employment and oil revenues had a positive effect and inflation rate had a negative effect on government tax revenues. Oil-free per capita production has the highest impact, and inflation has the least impact on tax revenues. The results also show that variable oil revenues with a two-year lag affect tax revenues. Another finding is that exchange rate and liquidity variables do not have a significant effect on tax revenues.