Estimated Tax Capacity of Kermanshah Province with Value-Added Approach

Background: Taxes, an important role in financing the one hand, and on the other hand the economic regulation play. Tax law, to adopt an appropriate tax policy, act as a factor of economic equilibrium. Objective: So consider how to increase tax revenue, as part of government revenues, is of particular importance, and therefore an accurate estimation of tax capacity, and identifying new sources it seems necessary. Results: In this study, a review of the basic concepts of tax at the macro level, and factors affecting the tax capacity, for the first time, the tax system in terms of components in Kermanshah province, during the period (1993- 2005), have been studied. With the tax base (value added economic sectors), to estimate the capacity of provincial tax paid, and have been evaluated. Conclusion: After calculating the capacity of the tax, the value added of the sector in 2002 (order to tax base), it was found that the in tax effort, less than one-sixth (15/5%) of the tax capacity, and saw a 84.5 percent tax gap in our province. However hypothesis is confirmed, because of the financial strength of most of the province's tax revenues.