Abstract

In this study, the tax capacity and effort and its relationship with oil revenue of 6 selected countries member in OPEC such as Iran, Kuwait, United Arab Emirates, Venezuela, Algeria and Saudi Arabia are considered. The study has been applied by panel data within 1990-2008. According to the results of Husman test, fixed effects method was confirmed for estimation of panel data. Therefore, tax capacity model was compiled and estimated via fixed effects method. The variables affecting the tax capacity including per capita income, open economics (import and export ratio to the gross domestic product) and oil revenue ratio to gross domestic product and tax capacity with one lag were considered. The summary of the analysis indicated that the relationship between the per capita income, oil revenue to gross domestic product ratio and tax capacity with one lag and dependent variable is positive and significant. Whilst the open economics grade in the oil countries has negative and significant relationship with the tax capacity. At the next stage, the tax effort was computed for the studied countries according to the results of tax capacity model estimation. The results of this study indicated that the tax effort in Iran is placed in lower ranks than Venezuela, Algeria and with a inconsiderable difference to Saudi Arabia in the fourth rank out of six studied countries.

Keywords:

OPEC, panel data, tax, tax effort index,

References

Competing interests

The authors have no competing interests.

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The authors have no competing interests.