Can IAX protocol reduce VoIP Latency ?

No - IAX, SIP and H.323 are layer4 and layer5 protocols.  Latency is introduced at Layers1-3 in the OSI model.

Essentially, Layer1 (the physical connectivity) is limited by the medium (ie: fiber, copper, wireless).

Layer2 adds a very small amount of latency as it is usually site-switching specific

Layer3 does add latency, but it depends on the distance limitations from layers1 and2.