Reform Bill of Direct Tax Act and Business Environment in Iran

This paper examines the pros and cons of new reform bill of direct tax act، and its effects on business environment in Iran. Doing business “paying taxes” index is used to study the effects of new reforms on ease of paying taxes in Iran. The results indicate that the enactment of the new bill would result in (1) no change in total tax rate; (2) reduction of time and number of tax payment; (3) powerful motivation for investment by accepting investment costs as the tax acceptable costs and by exemption of the excess value which is created via property revaluation. The negative aspects of the new bill are (1) introducing two new wealth taxes and (2) introducing personal income tax without reconsidering corporate tax and the structure of deductions and exemptions. In sum، after removing these shortcomings، enactment of the new bill makes doing business easier in Iran.