An Analysis of Tax Exemptions impact on Regional Economic Efficiency(Case Study of Tax Exemptions Subject of the Article 132, Direct Tax Act in the Deprived Areas)

The aim of this paper is to investigate tax exemptions impact on economic efficiency of Iran’s regions. One the objective of the regional tax exemptions is to strengthen economic status of the specific areas. In this way the government establishes support policy for investors and Entrepreneurs for transferring capital and other resources to those regions. This can result to accelerating economic development and growth. The main subject of this paper is to investigate tax exemptions impact on the deprived areas (subject of the Article 132 Direct Tax Act) on economic efficiency with two indexes، economic growth and development of country’s regions. Therefore، after reviewing the related literature، the research hypothesis was tested by econometric method and panel data. The results indicate that tax exemptions have no effects on average rate of economic growth and development in the provinces.