Introduction

Study the income tax proceeds in Iraq came through the importance of this tax at the level of financing public expenditure with the development of the sectors of trade and industry in this country and the emergence of new types of wealth is real estate wealth and on the level of no social and economic with the development goals of the Iraqi state and its intervention spiraled state in reliance upon the structure of taxation in the country, in order to maintain the outcome of sufficient income tax purposes must intensify all administrative, legal and executive efforts and even media awareness in order to achieve this goal, the service for the efforts of construction, development and upgrading of the level of services for citizens [1].

The Importance of Research

The importance of research stems from attention to the role of income tax proceeds with the rest of the sources of tax revenues in providing sources of funding development plans and reconstruction and providing basic services and the advancement of this away from dependence on the rest of the volatile resources such as oil income, which fluctuates in international markets and therefore the need to think about diversification sources of Iraqi Treasury [2].

Research Problem:

Income tax revenue in Iraq is not compatible with the size of how many services and Haj data and basic projects and the amount of familiar it to contribute to the public treasury of the Iraqi state in light of the widening spatial and demographic development map as the attempts to raise the toll in Iraq lacked scientific realism and professional In order to overcome the results of their decline.

The Hypothesis of Research:

The premise of the research from the following:

1.The growth of income tax revenues in the natural and legal form is a vital necessity for the success of the functions of the state in providing services and public projects and providing the state treasury.

2.Leaving administrative, legislative and procedural obstacles, and adhering to national identity, tax awareness, and avoiding legal and other circumvention, will provide tax revenues that meet the need [3].

Objective of Research:

The research aims to:

1.Studying the indicators of income in Iraq and its relevance to the goals set for it and the general role of its economic, financial and social functions.

2.Stop at all obstacles to this outcome and study and find out the causes of outbreaks in order to proceed with the process of treatment to reach the required outcome is adequate.

Spatial and temporal boundaries of research:

Iraq for a period of 2003-2016 m Structure of the research: To reach the goal of the search and then divided into 3 investigations are:

Chapter one/ theoretical input

Chapter Two/ income tax proceeds in Iraq

Chapter Three/ measuring the relationship between income tax revenues and GDP

Recommendations

Conclusions

Methodology

First Chapter: Theoretical Input

First: The tax:

A monetary obligation paid by the individual in a compulsory and final manner to the State or one of its public bodies as a contribution to the public burdens and the expression of social solidarity.

Importance of taxes:

1.It is a major source of public revenue to finance public expenditure, ie it aims to achieve a financial objective.

2.It aims to achieve economic purposes, ie contribute to economic guidance and stability as well as social purposes, which contribute to the social orientation.

3.It is one of the tools of fiscal policy that contributes to the handling of fluctuations in the economic cycle in the case of recession tax cuts and in the case of recovery tax increases.

The tax svstem there are two concepts of the tax system one narrow and the other is widely known tax system in its narrow sense that (the set of legal and technical rules that enable tax deduction in the successive stages of the legislation to link to collection).

The broad concept of it is (a group of ideological elements, legal, economic and technical which lead to a specific tax entity that represents one aspect of the existing economic system, which features from one country to another) vary.

Tax structure: means (types of taxes, rates, and applied in its veins country) (2).

Types of taxes: There are many taxes and each of the advantages and disadvantages and therefore try to choose the optimal mix of these taxes, which achieves the economic objectives, financial and social society in addition to a thorough understanding of the advantages and disadvantages of all types of taxes and therefore we find that the tax structures vary between countries due to differences j earned tax types and here we come to the fact that the tax structure is only part of the tax system in general taxes can be divided according to several criteria for discrimination, but the division that serves our research supports three types:

1. Income taxes consist of the following taxes :

A. Personal Income Tax

B. Property tax

C. Agricultural land tax

2. Wealth tax is made up of two types of n:

A. Inheritance tax

B. Land tax

3. Spendirg taxes include two sub-categories:

A. Customs taxes on imported goods

B. Taxes on consumption

Second: Income Tax: There are several definitions showing what this tax means and all agree

on the basic elements of the tax, income tax components, and purposes, methods of estimation and collection as well as legal adjustment... These definitions:

1.Income tax: - direct tax imposed on persons (whether natural or legal persons such as companies) who engage in occupations and activities (trade, services etc...) which increases their income for a certain amount of money per year where the state deduct part of the profits if people increased for a certain extent.

2.Income Tax: A sum of money collected by the financial authorities from the taxpayer for the account of the public treasury and represents part of the net income (profit) achieved during the year proceeding the estimated year.

3.Income tax is imposed on the annual income of individuals and institutions, where each taxpayer must exceed his income to a certain limit to pay a percentage of his income to the government as a tax. The salary he receives from his work within the institutions is net salary after deduction of debts and fees. In short, the income tax means deduction from the cash income produced by all Entities within State authorities and under applicable law at regular intervals.

Income tax components: Income tax is imposed on all the following types of incomes:

Wages for work including compensation, allowances and bonuses.

Profits resulting from the exercise of an agricultural, industrial, commercial or service activity.

Real estate profits whether arising from the sale or sale of a property (land or building).

Income resulting from the deposit of funds in banking institutions and investment in securities.

The role of income tax in achieving economic objectives: income tax is an important instrument of fiscal policy In order to achieve many objectives, especially the economic objective of the highest case of economic balance and employment and the economic objectives achieved by the imposition of income tax on the taxpayers are:

1- Income tax as a tool to address:

The problem of unemployment and by identifying the gap between GDP is possible and between GDP actual and then use the tax policy and to close that gap by reducing the tax rate or revised upwards. If the gap is positive, this indicates that there is a deflationary gap you need to expansionary tax policy by reducing the tax rate. If the gap is negative, it involves an inflationary gap that requires a tight fiscal policy, which is to increase the tax rate.

2- Income tax as a tool to deal with the problem of inflation and stagnation:

Inflation means the increase of the mass of cash from the value of the commodity cluster, which can be produced by the production device at the level of full operation resulting in higher prices because of the imbalance between the cash flow and the current commodity. Meeting the increase in demand the tax policy can be used to address inflation by raising tax rates or introducing new taxes in order to reduce the aggregate demand for imbalance with the supply of goods and services. This policy reduces the incomes of individuals, Thereby reducing the purchasing power of individuals, and vice versa. The tax policy works in a recession.

3- Income tax means to stabilize price levels:

The increase in the tax rate or the imposition of new taxes, as we said in the previous point will lead to a reduction in aggregate demand because the direct entry of individuals reduces them and thus reduce the total demand, which is reflected in the price levels and vice versa, that the decline in aggregate demand leads to lower prices levels and in this case the state In order to address this problem by reducing taxes to raise demand, which will in turn reflect the prices that will rise as a result of the tax policy pursued by the state.

Third: Tax revenue: The meaning of this research is the income tax only, which means the collection of final income tax income, which is returned to the state treasury from all sources of income tax. It is known that the tax revenues differ in the amount of state-to-state depending on the degree of development of the productive structure and the degree of dependence of these countries on the resources of rent and resources stemming from the core of the production process within the community and it is clear that the tax revenue in developed countries because there is considerable flexibility in the tax project to increase of the value and size of taxes, as well as the high cost of the mandate of the taxpayer and all this is due to the level of productive activity in the developed societies, which reflects positively on incomes and then on the obligations of individuals in those communities and vice versa regarding the tax revenue in the country developing.

It is well known that tax revenue has also explained the importance of a single tax of the most important financing of the general budget sources because they represent a general reaches of the revenues used by the state to cover expenses as well as a means to satisfy public needs, where exercise multiple functions, economic, social, cultural, service and security and military has increased the importance of the outcome of taxes and taxes in general in recent decades as one of the tools of financial policy and increasing interest in taxes in various countries of the world not only being the main source of public revenue, but also for considerations of the most important tools of economic policy used to guide economic activity and influence it. Several attempts were made to put the limit that stabilizes when tax revenue sees, a mainstream economists that the state cannot deduct more than 10 of national income through taxes because government expenditures financed by taxes affect private consumption and investment, and the role of each of the. The public and private sector in the economy of each country. Clark also called for the updated economists to not exceed the deduction rate more than (25%) of national income in the form of taxes, and the physicists claimed that the proportion of tax deduction should not exceed (20%) of income national (a) It is well known that there are several factors that affect the tax revenue such as tax price, tax evasion, estimated tax energy national tax allowances as well as tax administration Pal as well as with a secondary effect of factors such as general inflation for the economy, supporting information and tax work systems, the base charge, duplex tax and others.

Result and Discussion

Second Chapter: Income Tax in lraq

First: Income tax in Iraq

Income from direct tax has been imposed for the first time in Iraq under law No. 52 of 1927 has been replaced by Law No. 39 of 1939, which continued to work in it to1956. In 1959 issued the income tax act No. 95 of 1959 one of the new principles brought about by the new law, according to a rationale for its issuance reasons is the introduction of inputs subject to income tax and belonging to the costly one where subjected to a uniform scale of ratios rather than multiple tables, which the previous law was mentioned thirty - five times the law was amended during the period of its application (1959 1982) [4].

ln 1982, the Income Tax Law No. 1 13 was enacted and is in effect in the fiscal year 1983 (s)'Many

amendments have been made to this law, whether by laws, decisions or orders that have dealt with many of its provisions [5].

Which concerns us in this law some of his vocabulary as follows:

1. Income sources to which the tax is levied Article 2 of the law stipulates:

A. Profits of trades, trades or occupations, including undertakings and obligations.

B. Interest, commissions and profits from trading in shares and bonds.

C. Agricultural land lease allowances.

D. Salaries, pensions, remuneration, wages, work, allowances, allotments, and assessed and estimated amounts for housing, food and accommodation [6].

Table 1 any other source is not exempted by law and is not subject to any tax in Iraq.

2. The tax is levied according to Article 5 on the income of the resident and non-resident who receives it in Iraq and is not imposed on non-Iraqis who receive income outside lraq.

3. There are tax allowances for the wife and children and the taxpayer also to ease the tax burden according to Article VI of the law as well as there are exemptions for some incomes according to Article VII [7].

4. The last amendment to Law113was the2008amendment inwhich the deduction ratios

were adopted and the table below

Source: LawNo. I I 3 of 1982, as amended, Iraqi Gazelte No. 2917 of 1982

Second: Some indicators of income tax revenues during the research period:

Through Examined of table I and table 2,we note the fact that the income tax and the proceeds as follows:

1. The contribution rate of income tax in the tax revenue was34.4Yoin2004, which is the lowest contribution rate in this period (2003-2016) due to the many exemptions and permits granted by the Coalition Provisional Authority. The highest contribution rate of tax revenue is76.7Yo theyear20l5 is due to the inclusion of the property transfer tax under income taxes under Law No. 48 of 2015. The average contribution to total tax revenues increased to 58.2 Vo during this period due to the increased reliance on income tax in the tax structure and lower dependence on other taxes, as well as the introduction of the direct income tax deduction system from 2007 which raised tax revenues income was the lowest average for this period it is in2004, reaching 34.4% as we have previously , and if we know that the contribution of tax revenue as the average GDP for the research period ratio of l% did not exceed if the income tax to total tax revenue did not exceed as previously Pena , a ratio of 58.2Yo as Mediated through the duration of the research noted the limited participation of tax revenue in total tax revenue and GDP at current prices [8].

A source:

l- General Authority for Taxation Research and Studies Department

2- The annual report of the Central Bank of Iraq for 2017

3- Annual Statistical Abstract, Iraqi Ministry of Planning.

2. In all cases, as we have shown previously, the contribution rate of tax revenue in the gross output as an average of the research period does not exceed 1oZ, which is very low compared to the rate of tax revenue in some countries, which is similar to the circumstances of Iraq. For example, in2017, to GDP in Armenia 20.76yo, Albania 18.80%, Uzbekistan 14.55yo, Senegal 15.04yo, a Turkish 17.87yo, Georgia 23.760/0, Lebanon 15.20% This is at the level of tax revenue as a whole, not to mention the income tax income, which is the average of 58%o of the total tax revenue in Iraq, so a very low percentage is the ratio of the contribution of income tax to real GDP compared to selected countries [9].

3. As well as in the table(2) the proportion of income tax contribution in the total public revenues declined in this period (for research) to 1.1% due to the significant decline in the reliance on taxes (including income tax), and after the lifting of economic sanctions and export quantities of oil large saw this period cuts in income taxes and increased exemptions and increasing the phenomenon of tax evasion prices , which led to a decline in the proportion of the contribution of income tax in public revenue was according to table2 [10], the lowest proportion of the contribution of income tax in the total public revenues in 2003, where recorded 0.l and the highest rate in 2016, reaching 4.2, which is a very small proportion of E. A compared to those in other countries, as well as the magnitude of the amounts of wages and salaries and access to the various segments of society [11].

4. As for the income tax rate of different wages and salaries and incomes of members of Iraqi society as we see low as is evident in the table (1) where he decided law No. 113 of 1982, according to table 3%oto enter up to (500,000) thousand Iraqi dinars and 5% to enter up to (1000.000) million dinars and 10% up to (2000.000) million dinars andl5%owhat does it mean that increased the proportion of income tax mostly for the Iraqi society amounting to 5o/o, which is a very low rate is not conducive to the collection of tax proceeds contribute to the financial and economic of jobs Services are reflected in public expenditure, compared to those in some countries such as Morocco,

between l0o/o and 380/o, Tunisia Between 19.5% and35Yo, Algeriabetweenl0.5% and 35%, Syria 5% and 3.2 %, Egypt 10 % and 22%, Jordan 7% and 20%) [12]

5. The tax revenues in general and the income tax, especially in Iraq, are high. Tax revenues are very low due to many variables and reasons, foremost of which is the dependence of the Iraqi economy on oil revenues. This is why the Iraqi plan does not put the tax proceeds in its priority scale [13]. The tools of fiscal and economic policy and the question that imposes itself what if Iraq does not have oil wealth? The answer is certainly that the economic players will take into account the variables of the Iraqi economy and all its resources small and large to finance the public budget and if we studied the proportion of income tax income of GDP, except oil noted that the proportion in Iraq is 0.3o/o, which is also a very low percentage Reflects the large salaries and wages of most of the Iraqi people and does not meet the actual need in the absence of oil, but by comparing the ratio of taxes to GDP with the exception of oil with other countries to note that Iraq also has the lowest proportion, for example, the percentage in Algeria is 4.2%o and Morocco 3, 8 % Tunisia, 4.6% in Yemen 2.8% in Mauritania 5o% in Djibouti 3.2%). So we come to the fact that Iraq is still in the

care about their non-oil resources and this leads to a set of serious effects [14].

Third Chapter: Measure the relationship between income tax revenue and GDP

First requirement: model description : to know the nature of the relationship between the outcome of and gross domestic product ( GDP ) has been used GDP variable ( GDP ( As a dependent variable, and each of the public revenues ) PR ) And the outcome of tan revenue (OT (Income ta:r ) IT) As independent variables [15].

According to the logic of economic theory, there is a positive relationship between all independent variables with GDP. GDP is increasing with increasing revenues of all kinds, so we expect the parameters of the model to be positive (Table 3).

Second requirement: estimate model: at the beginning it will ensure that the stability of the time series to see if it contains the root of the unit (UNIT ROOT) Or not, through the test of Dickie Fuller developer (ADF), It has been shown through the table (4) that all-time series did not settle at their level, and stabilized public revenue chain (PR) At the first difference, while the GDP, tar revenue and income tax brackets stabilized at the second difference (Table 4).

Figure 1. Results of the stability of time series

Figure 2. Results of the stability of time series

Source: Program Outcomes EVIEWS 9

After making sure the stability of the time series, the model as a whole test by test Johansson Joint Integration (Counteraction) In order to ascertain the nature of the relationship is a short-tern or long-term relationship. Table (5) shows that through the impact test (Trace test) And Great characteristic values (Maximum Eigenvalue) there is no long-term equilibrium relationship between model variables.

Source: Program Outcomes EVIEWS 9

Because ofthe three variables did not settle down until the second difference, we can use causal Granger (Granger Causality) of the short-term, and Table (6) explains the results of the reasons of the Granger agencies:

1. The income tax revenue is causing a change in gross domestic product, and we believe that the reason is that the income tax proceeds are the largest among other tax types.

2. The change in gross domestic product (GDP) is causing a change in the tax revenues, due to the

fact that the increase in gross domestic product increases the incomes of individuals and companies, which raises the tax revenues of all kinds.

3. The change in public revenues is causing a change in gross domestic product, which is consistent with the logic of economic theory, as the increase in public revenues increases GDP.

4. The change in tax revenues causes a change in the income tax proceeds, because income tax is part of the tax revenue, and the increase in revenue implies an increase in income tax revenues.

5. The change in public revenues caused a change in the income tax proceeds, and this is also in line with the logic of economic theory, as the increase in public revenues will increase taxpayers (Table 6).

Source: Program Outcomes EVIEWS 9

Conclusion

Tax revenues, especially income tax, are a key pillar of the state budget, which is more reliable than other sources of funding that are affected by international and domestic political and economic conditions such as exports of raw materials and finished products, metals and oil, etc., or borrowing, He weighs his shoulders economically and politically, and here in order to reduce the fluctuation of the amount of money obtained in the form of taxes, especially the income tax from year to year ratios, this requires more efforts by tax departments to reduce. Reasons for the low tax revenues that affect the ability of the state and its agencies to implement projects and services; this depends on the establishment of mutual trust, understanding and understanding of the importance and right of payments in the form of income taxes. The decrease in the income tax revenues in Iraq has several reasons, the most important of which are:

1. Interest in the oil supplier significantly as Iraq is an oil country compared to other resources such as taxes and fees.

2. Weak scientific planning at the level of the economy, which takes into account the permanence of resources and not quantity and quantity.

3. Excess of exemptions and tax exemptions.

4.Lack of tax awareness and lack of transparency, which shows the citizens of the country's resources and windows of disbursement and mechanism of access.

5. The large dependence on indirect taxes, which constitute 80% of the tax revenue in Iraq and the lack ofinterest in the rest ofthe species, because ofthe ease ofcollection and a few cases of evasion.

6. The immaturity and inconsistency of tax legislation and its failure to cope with economic development and the country's financial and developmental needs.

7. Corruption and administrative and technological backwardness the tax administration is submerged in comrption and the methods of collection lag behind.

8. The result of wages and salaries and the entry of large segments of the Iraqi people is insignificant and this means low income tax proceeds accordingly and according to the logic of economic theory.

9. Weak accountability, punishment and complacency in imposing the law. The greater the punishment, the less the number of non-accountants tax.

Recommendations

1. The need to pay attention and raise the focus on the resources of the non-oil permanent supplier.

2. Rationalization of tax exemption rates.

3. The return of canceled taxes at intervals of time to eliminate the causes of war.

4. Reform in all aspects of the tax process, from legislation to collection, management, methods and transparency.

5. To convince the citizen through the media and awareness campaigns that paying the tax is a duty as a citizen's rights and this means the need to balance duties and rights.

6. Tighten the penalty on anyone who fails to pay the tax and impose retroactive penalties. 7. Provide facilities and incentives for all taxpayers such as installment, relative exemption and the provision of discounts encouraging the initiators of payment. 8. Spread the cooperative collective social awareness and cultivate the spirit of cooperation between the taxpayers and the tax departments. The tax collection process and tax assessment should be entrusted to employees with proven competence and high integrity.

9. The citizen's income and the circumstances of the country must be considered realistically and scientifically when the tax rate and the tax base report are established, and arbitrariness in this means evasion of tax and vice versa.