Investigating the effectiveness of tax penalties in Ardebil, Iran

Abstract

Correctly implementing the provisions of direct tax law is of the most important objectives of Tax Affairs Organization; accordingly, tax penalty system is among the most crucial guarantees for enforcement of this law. On the other hand, since tax is of long standing in Iran, compared to the majority of developing countries and some developed ones, the performance of tax system is an indicative of weaknesses with respect to law efficiency. Reluctant acceptance, and inefficiency of the previous tax law as well as the penalty system belonging to it, has caused to be revised and reformed. Reformation of the pervious law and creation of the existing one were aimed at accomplishing the objectives of development program in tax sector. However, with regard to what should have been materialized according to the anticipations, the country's tax law suffers from significant drawbacks with some existing articles and paragraphs. The present paper investigates two domains of jobs and companies in Ardabil province, and reveals the ineffectiveness of penalty system in these two tax sources.