Journal of Tax Reform
Modeling Tax Declaration Behavior and Quality of Tax Processing: A Game Theory Approach
Salah Salimian 1, 2, Mahdi Movahedi Beknazar 2, Sattar Salimian 3
1 Urmia University, Tehran, Iran
2 Iranian National Tax Administration, Tehran, Iran
3 Kharazmi University, Tehran, Iran
Abstract
Tax as one of the main levers in the micro and macro sectors of the economy it has greatly accelerated the growth of the economy, and today there are fewer countries that use it as a pillar Economic stability does not accept. On the other hand time receipt of taxes for countries is very vital and the basis of government planning for all projects and especially their budgeting. Governments are looking for ways to collect their target tax from taxpayers at the lowest possible cost. Thus, the most important step to achieve this goal is for taxpayers to declare the actual amount of tax they have paid in tax return. This paper deals with modeling the game between taxpayers and National Tax Administration. The results showed that the equilibrium declared tax of taxpayers is a function of assessed due tax, the quality of assessment groups, the number of assessments and the parameter of taxpayers’ dishonesty. The taxpayers’ equilibrium declared tax is increasing relative to the quality of their assessment groups and decreasing relative to other assessment groups. With increase in the likelihood of dishonesty, the declared tax of larger taxpayers will increase and the declared tax of smaller taxpayers will decrease and vice versa. Furthermore, if the quality difference of two assessment groups is only vertical, then assessed due tax and the equilibrium declared taxes will be equal. Finally, increase in the number of assessment leads to increase in the declared tax of larger taxpayers and decrease in the declared tax of smaller taxpayers and vice versa.
Keywords
game theory, modeling, tax, uniform distribution, uncertainty of assessment quality
JEL classification
C70, C63, H21, D31, D29References
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About Authors
Salah Salimian – PhD in Economics, Department of Economics, Urmia University and Iranian National Tax Admission Organization (LTU) Master Auditor, Tehran, Iran (1878, Urmia, Iran); ORCID: https://orcid.org/0000-0002-4938-950X; e-mail: salahsalimian@yahoo.com
Mahdi Movahedi Beknazar – Member of the Scientific Shahed University, Department of Humanities & Head of Education, Research and Planning, Tehran, Iran (No. 151, Mirdamad St., Tehran, Iran); ORCID: https://orcid.org/0000-0001-9565-6771; e-mail: M.Movahedi@shahed.ac.ir
Sattar Salimian – MA Student in Energy Economic, Department of Economic, Kharazmi University, Tehran, Iran (No. 43, South Mofatteh Ave., Tehran, Iran); ORCID: https://orcid.org/0000-0003-1345-3829; e-mail: sattar.salimian@yahoo.com
For citation
Salimian S., Beknazar M.M., Salimian S. Modeling Tax Declaration Behavior and Quality of Tax Processing: A Game Theory Approach. Journal of Tax Reform. 2023;9(1):64–75. https://doi.org/10.15826/jtr.2023.9.1.129
Article info
Received February 13, 2022; Revised January 9, 2023; Accepted January 25, 2023
DOI: https://doi.org/10.15826/jtr.2023.9.1.129
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