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Modeling of Real Estate Income Tax: System Dynamics Approach

Author

Listed:
  • Hazrati, Manochehr

    (Department of Management, Tabriz Branch, Islamic Azad University)

  • Bafandeh Zendeh, Alireza

    (Department of Management, Tabriz Branch, Islamic Azad University)

  • Aali, Samad

    (Department of Management, Tabriz Branch, Islamic Azad University)

Abstract

This study aims to design a model to realize real estate income tax in Tabriz city with due attention to the tax collection process. According to the related literature, the variables of "tax payment," "real estate," "tax evasion," "investment incentive," "rent and real estate speculation," and "advertisement in tax collection" are considered as key variables, affecting the conceptual model of real estate tax system. According to the dynamic systems method, the interaction and relationships between variables are shown by state-flow diagrams based on the literature and experts' opinions. These relationships are finally simulated by Vensim software. The results show that advertisement has a significant effect on the amount of taxes paid by taxpayers. Tax transparency has also reduced rents for taxpayers and ultimately reduced tax evasion and timely tax collection in the estimated budget of real estate resources and single-occupancy jobs. Scenarios show that lowering the tax rate in the trading and business market and large corporations and businesses' rental income are strongly influenced by tax revenues.

Suggested Citation

  • Hazrati, Manochehr & Bafandeh Zendeh, Alireza & Aali, Samad, 2020. "Modeling of Real Estate Income Tax: System Dynamics Approach," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 15(4), pages 463-487, October.
    • Handle: RePEc:mbr:jmonec:v:15:y:2020:i:4:p:463-487
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    References listed on IDEAS

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    More about this item

    Keywords

    Real Estate Income Tax; Income Tax Jobs; System Dynamics; Economic Rent; Speculation;
    All these keywords.

    JEL classification:

    • N12 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: 1913-
    • N25 - Economic History - - Financial Markets and Institutions - - - Asia including Middle East
    • P43 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Finance; Public Finance
    • P44 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - National Income, Product, and Expenditure; Money; Inflation
    • O42 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Monetary Growth Models

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