The Impact of Taxation Process on Firms' Production: Evidence of Tax Complexities and Practices in Iranian Industries

Qavami, Hadi; Abedi, Ahmad

doi:10.22059/jte.2026.395372.1009007

The Impact of Taxation Process on Firms' Production: Evidence of Tax Complexities and Practices in Iranian Industries

Document Type : Research Paper

Authors

Hadi Qavami ¹
ahmad abedi ²

¹ Department of Economics, Faculty of Administrative and Economic Sciences, Ferdowsi University of Mashhad, Mashhad, Iran.

² Department of Economics, Faculty of Administrative and Economic Sciences, Ferdowsi University of Mashhad

10.22059/jte.2026.395372.1009007

Abstract

The impact of taxes on corporate production is not limited to the rate and amount of tax collected from them. Rather, the manner in which taxes are collected within the framework of a tax environment and through tax actions is also important. The simpler and more transparent this environment is, and the less costly and more effective tax actions are, the less costly and frictional the government’s tax revenues will be, and the less disrupted the companies’ production activities will be. Therefore, to examine this important issue in the tax collection process in Iran, the tax files of 54 member companies of the Tehran Stock Exchange from six industries, namely petrochemicals, detergents, basic metals, pharmaceuticals, food, and automobiles, were examined during the years 2006 to 2011. The results of the study show that tax actions created in the litigation process, which are the result of the company's efforts to reduce the tax authority's tax assessment and bring the final tax closer to the company's declared tax, as well as tax complexities, have had a significant and adverse effect on the total production of the companies studied. However, the results in the petrochemical and basic metals industries have been somewhat different.

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Main Subjects

References

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