Assessing Subsidies and Indirect Taxes from  Social Welfare Aspect in Iran

Piraee, Khosrow; Shahsavar, Mohammad Reza

Assessing Subsidies and Indirect Taxes from Social Welfare Aspect in Iran

Document Type : Original Article

Authors

Khosrow Piraee ¹

Mohammad Reza Shahsavar ²

¹ Associate Professor of Economics, Islamic Azad University, Shiraz Branch

² کارشناس ارشد اقتصاد دانشگاه آزاد اسلامی واحد شیراز

Abstract

The government fiscal policy can be said to be pro-poor if it benefits the poor more than the non-poor.
In this research by using the concept of social welfare it states that which goods and services should be subsidized or taxed to maximize social welfares. For this purpose, in the viewpoint of welfare the concept of elasticity of Atkinson social welfare with respect to prices is used and then price reform index is derived and finally this index is used for assessing indirect taxes and subsidies.
The results of this research during the years of 2000-2005 in urban and rural areas in Iran, indicate increasing in price of food items hurts the poor more than the rich and subsidizing these items (excluding beverages and tobacco) have been pro-poor while the increasing in price of the items like health care, transportation, communication and education hurt the rich more than the poor and the rich benefit more than the poor from these subsidies. Therefore, view in the subsidy and taxing on the mentioned sectors for purpose of reducing the inequality for welfare improvement and thus reform is seemed necessary.

Keywords

Words: Subsidy

Indirect Tax

Pro-Poor Policy

Welfare Elasticity

Price Reform Index

Atkinson Social Welfare Function

منابع

الف- فارسی

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