Pages: 1-7

Abstract

Abstract: Municipalities in many countries around the world, has a key role in the economic development of cities and making decisions about many aspects of the city's economy has been transferred to municipalities. Municipalities that are mainly responsible for serving the people and producing of goods and public service needed in the city, are dependent on sources of income for covering their costs. Thus, astudy of the affecting factors of Municipal revenue sources, especially tax resources are essential. Economically taxes are considered as one of the most relevant national and local government revenue sources. While Taxes are financing resources, they are being considered as an efficient tool to implement economic policies. For this reason, an efficient tax system is essential for the continuation of national and local governments. The lack of a proper tax systemnot only will lead toan absence of the above advantages, but also a reduction in social welfare and purchasing power of citizens and thereby reducing the revenues of municipalities. So it cannot be said that increasing governmenttax revenues are not necessarily leading to an increase in municipal revenue. This article will investigate the interactions between tax revenues with municipal revenues of Ahvaz by a VAR model. The results of this study show that the increase in tax revenues, leads to decreased revenues of Ahwaz Municipality.