The Impact of Tax Revenues on Economic Growth in Business Cycles of the Iranian Economy: An Application of the Markov Switching Model

In recent years, tax revenues have become particularly important due to the increase in international sanctions and the decline in oil revenues; as the most important source of income, tax revenues have an impact on economic growth. Determining the impact of different taxes on economic growth in business cycles can be effective in the use of efficient tax policies. Therefore, in the present study, our aim is to investigate the effect of tax revenues by type of taxes in the country's business cycles in the period 2005: 1-2018: 2 quarterly in the form of Markov rotational model.. The results show that income tax has no significant effect in recession and no significant effect in boom. Taxes on companies and taxes on goods and services, regardless of the business cycles that affect the country's economy. Also, import tax has no significant effect during the boom period and has had an effect during the recession. The effect of growth of the country's total tax revenues shows that if the country is in a recession, it will have a negative and significant effect, and if it is in a state of prosperity, it will have a positive and significant effect. The growth of the exchange rate and the growth of oil prices will have a significant impact in all periods. In times of recession, the goal should not be to increase tax revenues alone, but the growth of taxes should be based on the business period and the type of tax, and also based on the results of indirect tax growth in the conditions of the country's economy can be fruitful.