Determinants of Tax Effort and Tax Capacity in Jordan During the Period (2000-2017)

Saleh Yahya Al-Freijat; Mohammad Khalil Adeinat

doi:doi:10.11648/j.ijber.20200901.11

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Determinants of Tax Effort and Tax Capacity in Jordan During the Period (2000-2017)

Saleh Yahya Al-Freijat, Mohammad Khalil Adeinat

Published in International Journal of Business and Economics Research (Volume 9, Issue 1)

Received: 15 December 2019 Accepted: 3 January 2020 Published: 17 January 2020

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Abstract

The main objective of this study was to measure the tax capacity and tax effort in Jordan by using cross-sectional time series data for 59 countries during the period (2000-2017), where the modal was estimated by the least squares method and the normal results of the study, (OLS), the result of the study showed a positive relationship between the tax burden and the share of exports of GDP, while the relationship was inverse with the value added of the manufacturing sector, per capita income and the share of the services sector of GDP. As for the estimated tax effort, the results showed that the data of Jordan were compensated in the estimated standard model where the tax capacity in Jordan in 2017 was about 16.1%, this means that Jordan is close to the upper limits of the tax capacity; in 2017 the tax burden has reached about 15.7%. Taking into account the impact of the procedures that the government has taken since the begging of 2018, especially the sales tax and the special taxes on oil, this means that Jordan is close to the limits of tax exhaustion. The results of the study also showed that the tax effort in Jordan is high, thus means that the category that pays taxes pays more than its capacity taxes, and these counts as an exhaustion on the productive sectors, which negatively affects the competitiveness. The study recommended the importance of the effective utilizing of tax capacity for individuals and for the economy and maintains acceptable levels of tax effort and not to exceed these levels.

Published in	International Journal of Business and Economics Research (Volume 9, Issue 1)
DOI	10.11648/j.ijber.20200901.11
Page(s)	1-10
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2020. Published by Science Publishing Group

Keywords

Tax Effort, Tax Burden, Tax Capacity, GDP

References

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[4]	Dunken, Denvil&Sabirianova Peter. Klara. Tax progessivity and income inequality. Georgia State University, Department of Economics. Andrew Young School of Public studies, 2008.
[5]	Baer, Werner; Galvao, Antonio. Tax burden, government expenditure and income distribution in Brazil, CIBER series papers, 2005.
[6]	Maroun, Warren. Does capital tax add to or detract from the fairness of south African tax system?, University of Witwatersrand, South Africa, 2010.
[7]	Al Aroukoub, Hashem Mohamed, Sami, Mohamed (2006). The financing role of taxes in selected Arab developing countries for the period 1980-2002, Rafidain Development, 82, (28).
[8]	Mirrlees, James. Dimensions of tax design, Institute for Fiscal Studies, Oxford University Press, 2010.
[9]	Pessino, Carola & Fenochietto, Ricardo. Determining countries tax effort, Hacienda Pública.
[10]	Toufik Hadjmaoui & Hanane Benatek. Tax Capacity and Tax Effort of Aleria from 1981 to 2014. Strategy and Development Review, 2018, 8 (15): 109-124.
[11]	Le, Minh Tuan; Moreno-Dodson, Blanca; Bayraktar, Nihal. Tax capacity and tax effort extended cross-country analysis from 1994 to 2009", Policy Research Working Paper 625, The World Bank, 2012.
[12]	Gupta Abhijit. Determinants of tax revenue efforts in developing countries. International Monetary Fund, Working Paper, 2007, 7 (184): 1-39.
[13]	Bashayreh, AlaGhaleb. Tax Capacity and Effort and Economic Implications: Evidence from Jordan. Jordan Journal of Economic Sciences, 2016, 3, (2): 179-191.
[14]	The Economic and Social Council (2014). Tax evasion in Jordan, its causes, methods, and magnitude, Economic and Social Council, Amman, Jordan.
[15]	Al-Majali, Ahmed Abdel-Qader. (2016). Capacity Estimation and Tax Effort in Jordan = Estimating Tax Capacity and Tax Effort in Jordan. Dirasat: Administrative Sciences, 161 (3988), 1-23.
[16]	Zdenka Zakova Kroupova; Josef Slaboch. Tax capacity and tax effort in Visegrad Group countries and in old member EU states. Conference: Theoretical and practical aspects of public finance, At Prague, Volume: XXI, 2015.
[17]	Fenochietto, Pessino. Understanding countries’ tax effort, International Monetary Fund, 2013, Working Paper No. 13/244.
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[19]	Christina Romer & Romer, D. (2010). The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks, American Economic Review, Vol. 100, No. 3, 2010.
[20]	Eltony, M. Nagy. Measuring tax Effort in Arab countries, Arab planning institute, 2002.
[21]	Española / Revista de Economía Pública, (195 4/2010): 6587.
[22]	Center for Strategic Studies - University of Jordan in cooperation with the Amman Chamber of Commerce, Income Tax Law: An Assessment of Reality and Possible Alternatives, 2018.

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Saleh Yahya Al-Freijat, Mohammad Khalil Adeinat. (2020). Determinants of Tax Effort and Tax Capacity in Jordan During the Period (2000-2017). International Journal of Business and Economics Research, 9(1), 1-10. https://doi.org/10.11648/j.ijber.20200901.11

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ACS Style

Saleh Yahya Al-Freijat; Mohammad Khalil Adeinat. Determinants of Tax Effort and Tax Capacity in Jordan During the Period (2000-2017). Int. J. Bus. Econ. Res. 2020, 9(1), 1-10. doi: 10.11648/j.ijber.20200901.11

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AMA Style

Saleh Yahya Al-Freijat, Mohammad Khalil Adeinat. Determinants of Tax Effort and Tax Capacity in Jordan During the Period (2000-2017). Int J Bus Econ Res. 2020;9(1):1-10. doi: 10.11648/j.ijber.20200901.11

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@article{10.11648/j.ijber.20200901.11,
  author = {Saleh Yahya Al-Freijat and Mohammad Khalil Adeinat},
  title = {Determinants of Tax Effort and Tax Capacity in Jordan During the Period (2000-2017)},
  journal = {International Journal of Business and Economics Research},
  volume = {9},
  number = {1},
  pages = {1-10},
  doi = {10.11648/j.ijber.20200901.11},
  url = {https://doi.org/10.11648/j.ijber.20200901.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20200901.11},
  abstract = {The main objective of this study was to measure the tax capacity and tax effort in Jordan by using cross-sectional time series data for 59 countries during the period (2000-2017), where the modal was estimated by the least squares method and the normal results of the study, (OLS), the result of the study showed a positive relationship between the tax burden and the share of exports of GDP, while the relationship was inverse with the value added of the manufacturing sector, per capita income and the share of the services sector of GDP. As for the estimated tax effort, the results showed that the data of Jordan were compensated in the estimated standard model where the tax capacity in Jordan in 2017 was about 16.1%, this means that Jordan is close to the upper limits of the tax capacity; in 2017 the tax burden has reached about 15.7%. Taking into account the impact of the procedures that the government has taken since the begging of 2018, especially the sales tax and the special taxes on oil, this means that Jordan is close to the limits of tax exhaustion. The results of the study also showed that the tax effort in Jordan is high, thus means that the category that pays taxes pays more than its capacity taxes, and these counts as an exhaustion on the productive sectors, which negatively affects the competitiveness. The study recommended the importance of the effective utilizing of tax capacity for individuals and for the economy and maintains acceptable levels of tax effort and not to exceed these levels.},
 year = {2020}
}

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TY  - JOUR
T1  - Determinants of Tax Effort and Tax Capacity in Jordan During the Period (2000-2017)
AU  - Saleh Yahya Al-Freijat
AU  - Mohammad Khalil Adeinat
Y1  - 2020/01/17
PY  - 2020
N1  - https://doi.org/10.11648/j.ijber.20200901.11
DO  - 10.11648/j.ijber.20200901.11
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 1
EP  - 10
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20200901.11
AB  - The main objective of this study was to measure the tax capacity and tax effort in Jordan by using cross-sectional time series data for 59 countries during the period (2000-2017), where the modal was estimated by the least squares method and the normal results of the study, (OLS), the result of the study showed a positive relationship between the tax burden and the share of exports of GDP, while the relationship was inverse with the value added of the manufacturing sector, per capita income and the share of the services sector of GDP. As for the estimated tax effort, the results showed that the data of Jordan were compensated in the estimated standard model where the tax capacity in Jordan in 2017 was about 16.1%, this means that Jordan is close to the upper limits of the tax capacity; in 2017 the tax burden has reached about 15.7%. Taking into account the impact of the procedures that the government has taken since the begging of 2018, especially the sales tax and the special taxes on oil, this means that Jordan is close to the limits of tax exhaustion. The results of the study also showed that the tax effort in Jordan is high, thus means that the category that pays taxes pays more than its capacity taxes, and these counts as an exhaustion on the productive sectors, which negatively affects the competitiveness. The study recommended the importance of the effective utilizing of tax capacity for individuals and for the economy and maintains acceptable levels of tax effort and not to exceed these levels.
VL  - 9
IS  - 1
ER  -

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Author Information

Saleh Yahya Al-Freijat

Department of Business Economics, School of Graduate Studies, University of Jordan, Amman, Jordan
Mohammad Khalil Adeinat

Department of Business Economics, School of Business, University of Jordan, Amman, Jordan

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APA Style

Saleh Yahya Al-Freijat, Mohammad Khalil Adeinat. (2020). Determinants of Tax Effort and Tax Capacity in Jordan During the Period (2000-2017). International Journal of Business and Economics Research, 9(1), 1-10. https://doi.org/10.11648/j.ijber.20200901.11

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ACS Style

Saleh Yahya Al-Freijat; Mohammad Khalil Adeinat. Determinants of Tax Effort and Tax Capacity in Jordan During the Period (2000-2017). Int. J. Bus. Econ. Res. 2020, 9(1), 1-10. doi: 10.11648/j.ijber.20200901.11

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AMA Style

Saleh Yahya Al-Freijat, Mohammad Khalil Adeinat. Determinants of Tax Effort and Tax Capacity in Jordan During the Period (2000-2017). Int J Bus Econ Res. 2020;9(1):1-10. doi: 10.11648/j.ijber.20200901.11

Copy | Download

@article{10.11648/j.ijber.20200901.11,
  author = {Saleh Yahya Al-Freijat and Mohammad Khalil Adeinat},
  title = {Determinants of Tax Effort and Tax Capacity in Jordan During the Period (2000-2017)},
  journal = {International Journal of Business and Economics Research},
  volume = {9},
  number = {1},
  pages = {1-10},
  doi = {10.11648/j.ijber.20200901.11},
  url = {https://doi.org/10.11648/j.ijber.20200901.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20200901.11},
  abstract = {The main objective of this study was to measure the tax capacity and tax effort in Jordan by using cross-sectional time series data for 59 countries during the period (2000-2017), where the modal was estimated by the least squares method and the normal results of the study, (OLS), the result of the study showed a positive relationship between the tax burden and the share of exports of GDP, while the relationship was inverse with the value added of the manufacturing sector, per capita income and the share of the services sector of GDP. As for the estimated tax effort, the results showed that the data of Jordan were compensated in the estimated standard model where the tax capacity in Jordan in 2017 was about 16.1%, this means that Jordan is close to the upper limits of the tax capacity; in 2017 the tax burden has reached about 15.7%. Taking into account the impact of the procedures that the government has taken since the begging of 2018, especially the sales tax and the special taxes on oil, this means that Jordan is close to the limits of tax exhaustion. The results of the study also showed that the tax effort in Jordan is high, thus means that the category that pays taxes pays more than its capacity taxes, and these counts as an exhaustion on the productive sectors, which negatively affects the competitiveness. The study recommended the importance of the effective utilizing of tax capacity for individuals and for the economy and maintains acceptable levels of tax effort and not to exceed these levels.},
 year = {2020}
}

Copy | Download

TY  - JOUR
T1  - Determinants of Tax Effort and Tax Capacity in Jordan During the Period (2000-2017)
AU  - Saleh Yahya Al-Freijat
AU  - Mohammad Khalil Adeinat
Y1  - 2020/01/17
PY  - 2020
N1  - https://doi.org/10.11648/j.ijber.20200901.11
DO  - 10.11648/j.ijber.20200901.11
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 1
EP  - 10
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20200901.11
AB  - The main objective of this study was to measure the tax capacity and tax effort in Jordan by using cross-sectional time series data for 59 countries during the period (2000-2017), where the modal was estimated by the least squares method and the normal results of the study, (OLS), the result of the study showed a positive relationship between the tax burden and the share of exports of GDP, while the relationship was inverse with the value added of the manufacturing sector, per capita income and the share of the services sector of GDP. As for the estimated tax effort, the results showed that the data of Jordan were compensated in the estimated standard model where the tax capacity in Jordan in 2017 was about 16.1%, this means that Jordan is close to the upper limits of the tax capacity; in 2017 the tax burden has reached about 15.7%. Taking into account the impact of the procedures that the government has taken since the begging of 2018, especially the sales tax and the special taxes on oil, this means that Jordan is close to the limits of tax exhaustion. The results of the study also showed that the tax effort in Jordan is high, thus means that the category that pays taxes pays more than its capacity taxes, and these counts as an exhaustion on the productive sectors, which negatively affects the competitiveness. The study recommended the importance of the effective utilizing of tax capacity for individuals and for the economy and maintains acceptable levels of tax effort and not to exceed these levels.
VL  - 9
IS  - 1
ER  -

Copy | Download