Tax Mobilization Performance in Iran: A Comparative Analysis with Regional Peers
Keywords:
Tax Mobilization, Iran Economy, Oil Revenue Dependency, VAT Efficiency, PIT and CIT Productivity, Fiscal Sustainability, Comparative Analysis, Middle East Economies.Abstract
The Islamic Republic of Iran faces significant fiscal challenges due to its heavy dependence on volatile oil revenues and prolonged economic pressure from international sanctions. In this context, strengthening domestic tax mobilization has become essential for achieving fiscal sustainability and reducing reliance on oil income. Despite being one of the largest economies in the Middle East, Iran has historically underutilized its tax capacity, resulting in structural weaknesses in its fiscal system.
This study examines Iran’s tax mobilization performance using key indicators from the Collecting Taxes Database (CTD), including the value-added tax (VAT) efficiency ratio, personal income tax (PIT) productivity, and corporate income tax (CIT) productivity. A comparative analysis is conducted with selected regional peers—Pakistan, Afghanistan, Australia, Turkey, and Saudi Arabia—to assess relative performance and identify gaps.
The findings highlight that Iran’s tax system remains below its potential due to inefficiencies in tax administration, limited tax base, and structural constraints. The paper concludes by emphasizing the need for comprehensive tax reforms, including improved compliance, digitalization, and policy adjustments, to enhance domestic revenue mobilization and ensure long-term fiscal stability.
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