Payame Noor University Economic Growth and Development Research 2228-5954 7 28 2017 09 23 Study of Regional Development Targeted Incentives Using DID Approach, Case Study: Tax Exemptions Article 132 of Direct Tax Act Study of Regional Development Targeted Incentives Using DID Approach, Case Study: Tax Exemptions Article 132 of Direct Tax Act 33 50 3480 FA Yeganeh Mousavi Jahromi Professor of Economics, Payame Noor University 0000-0001-9281-6119 Mohammad Reza Razavi Head of Iran’s Institute For Trade Studies and Research & Assistant Professor of Economics, Islamic Azad University, Tehran, Iran Farhad Khodadad Kashi Professor of Economics, Payame Noor University Seied Hossien Eizadi Ph.D. Student & Faculty Member of Economics, Payame Noor University Journal Article 2016 12 30 Iran’s tax system includes many forms of tax incentives, like as regionally targeted tax incentives<span lang="AR-SA" dir="RTL">.</span> According to direct tax act, article 132, that includes this kind of incentive, declared taxable income of manufacturing and mining activities in less developed regions are totally (100%) exempt from corporate income tax for ten years. The aim of this study is to estimate the impact of tax exemptions of article 132 on employment of Iran’s less developed counties for the period from 1996 to 2008. In the present paper, a two- stage method is used. In the first stage, a proper control group is selected for each treated county by using Synthetic Control Method (SCM) and Genetic algorithm, and the impact of tax incentives article 132 on employment in Iran’s less developed regions is estimated via Difference in Difference (DID) Method, in the second stage. Results indicate that tax exemptions in mentioned Article have no impact on employment of Iran’s less developed counties. Iran’s tax system includes many forms of tax incentives, like as regionally targeted tax incentives<span lang="AR-SA" dir="RTL">.</span> According to direct tax act, article 132, that includes this kind of incentive, declared taxable income of manufacturing and mining activities in less developed regions are totally (100%) exempt from corporate income tax for ten years. The aim of this study is to estimate the impact of tax exemptions of article 132 on employment of Iran’s less developed counties for the period from 1996 to 2008. In the present paper, a two- stage method is used. In the first stage, a proper control group is selected for each treated county by using Synthetic Control Method (SCM) and Genetic algorithm, and the impact of tax incentives article 132 on employment in Iran’s less developed regions is estimated via Difference in Difference (DID) Method, in the second stage. Results indicate that tax exemptions in mentioned Article have no impact on employment of Iran’s less developed counties. https://egdr.journals.pnu.ac.ir/article_3480_4ceae8afafee0336e66a3d3b1197d24c.pdf