The status of simplification in tax reform plans: Global experience and the challenges for the Iranian tax system

In recent two decades, tax simplification has turned to be one essential componentof tax reform plans in different countries. This is not only due to negative impactscomplexity has on voluntary compliance costs resulting in tax evasion, but also dueto the fact that it is a big barrier to tax fairness and efficiency (in case of incometaxes) and as such, it is a factor far beyond administrative and compliance costs.Although a deeper understanding of various aspects of tax simplification requiresmore comprehensive investigations, this paper, which seems to be just a point ofdeparture for putting such issues under discussion in Iran, aims at exploringdifferent dimensions of tax simplification, reviewing different countries’experience, and, in the end, offering some recommendations for reforming theIranian tax system. Investigations show that a low compliance rate, a high volumeof administrative circular directives, and an inappropriate combination of taxrevenues do obviously indicate that the existing taxation system in Iran is quitecomplicated. Therefore, one of the essential challenges ahead of the Iraniantaxation system can be tax simplification, in general, and tax laws simplification, inparticular, which demands for a serious interaction between tax authority andlegislating institutions.