Investigating the effect of tax exemptions subject to Article 132 (BC) of the Law on Direct Taxes on the Number and Value Added of Industrial Units Established in Exempt Areas in Iran

Fiscal policies can be used as an appropriate tool to achieve regional balanced development goals and programs. In this regard, the government can contribute to the development goals of balanced development of regions through effective and efficient tax exemptions by increasing investment, transfer of knowledge and technology. In this regard, the purpose of this study is to investigate the effect of tax exemptions (Article 132 of the Law on Direct Taxes) on the number and value added of industrial units established in deprived and less developed areas in Iranian provinces using method of panel data during 2006-2016. The results indicate that the volume of physical capital, the number of employees, government capital expenditures and bank payment facilities to industrial sector have positive effects on the number and value added of industrial units. Also, the tax exemptions subject to Article 132 have not effect on the number and value added of industrial units in deprived and less developed areas.