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Transformation of Tax Policy in the Context of Iran’s Changing Anti-Sanctions Strategy

Author

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  • Lyudmila P. Koroleva

    (Financial University under the Government of the Russian Federation, Moscow, Russian Federation)

Abstract

The Iranian resistance economy model increasingly relies on tax policy in search of a stable replacement for oil revenues. However, the rising tax burden causes discontent within the country and encourages tax evasion. The 2024–2029 anti-crisis strategy pays great attention to tax reforms. In this regard, the article examines the transformation of the tax policy of the Islamic Republic of Iran in the context of changing anti-sanction strategies: from resistance to recovery. The purpose of the study is to identify and systematize modern trends in the transformation of the tax policy of the Islamic Republic of Iran in the context of the evolution of anti-sanction strategies within the paradigm of the resistance economy. A brief description of the changes in the sanctions regime in 1979–2025 is given. An analysis of the indicators of the scale of the economy, economic growth, revenues, expenditures and budget deficit for 2015–2024 showed that the country is successfully resisting the sanctions. The economy demonstrates growth, budget imbalance and public debt within the acceptable values recognized by the international community. However, despite this, it is not possible to achieve the planned level of tax revenues. The article discusses the problems and prospects for increasing tax revenues. It is proposed to consider the evolution of Iran’s tax policy in accordance with the stages of significant changes in the sanctions regime. The trends in the transformation of key taxes are established: corporate and individual income taxes, luxury taxes, VAT. Tax maneuvers are defined that are implemented when Iran’s anti-sanction strategy changes. The general features and characteristics of Iran’s tax system and policy are revealed in the context of the specifics of the regulatory mechanism of the resistance economy and the reorientation of the new anti-sanction strategy to reconstruction and recovery. The results of the study are of practical importance both for improving Iran’s tax policy and for other countries under sanctions in order to develop adaptive fiscal strategies.

Suggested Citation

  • Lyudmila P. Koroleva, 2026. "Transformation of Tax Policy in the Context of Iran’s Changing Anti-Sanctions Strategy," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 1, pages 131-147, February.
  • Handle: RePEc:fru:finjrn:260108:p:131-147
    DOI: 10.31107/2075-1990-2026-1-131-147
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    Keywords

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    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development

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