Investigating the Tax Fraud Determining Factors in the Iran's Economy by Examining Bayesian Econometrics

Tax evasion is one of the main activities of the informal sector of the economy and is one of the most important issues and problems of the tax system. Given the fundamental role of tax evasion in reducing public government revenues; Awareness of the reasons and factors determining the tax evasion of Iran's economy is important for policymakers and financial officials to control and reduce its growth. Therefore, in the present study, tax evasion during the period 1360-1396 has been estimated using the  new monetary demand function approach and the VECM vector error correction model. Then, using Bayesian econometric approach and using Bayesian model averaging (BMA) method, the factors affecting tax evasion in Iran's economy have been studied. The results of this study show that the trend of tax evasion index has been increasing during the period under review. Also, the variables of tax burden, degree of urbanization, oil revenues, unemployment rate and tax complexity have had the greatest impact on tax evasion.