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The Determinants of Tax Revenues: Empirical Evidence From Jordan

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  • Ali Mustafa AL-Qudah

Abstract

The purpose of this study is to identify the determinants of tax revenues (TXR) in Jordan. The study covered the period (1990-2019) and used ARDL Bound test for co-integration, ARDL Long Run form, and ARDL Error Correction regression to examine the study hypotheses. The results of the bound test and co-integration equation (CointEq1) shows that there exists a long run relationship between (INDUST, LPCI, FD, FAID, GE, OPEN) and (TXR) in Jordan. The analysis results revealed that per capita GDP, fiscal deficit and government expenditure have a positive significant impact on tax revenues in the short run and long run. While, Foreign aids has a negative significant impact on tax revenues. Industrial sector Value added and economic openness have a positive significant impact in the short run while having a positive insignificant impact on tax revenues in the long run. The results explore that per capita GDP, fiscal deficit, foreign aids and government expenditure are good determinants for tax revenues in the short run as well as in the long run, while industrial sector value added and economic openness are good determinants in the short run. The findings suggest a reduction in government expenditure due to the upward trend in the fiscal deficit and public debt, and the continued increase in (GE) leading to more internal and external imbalances.

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  • Ali Mustafa AL-Qudah, 2021. "The Determinants of Tax Revenues: Empirical Evidence From Jordan," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 12(3), pages 43-54, May.
    • Handle: RePEc:jfr:ijfr11:v:12:y:2021:i:3:p:43-54
    DOI: 10.5430/ijfr.v12n3p43
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    References listed on IDEAS

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    1. Rachid Boukbech & Ahmed Bousselhami & Elhadj Ezzahid, 2019. "Determinants of Tax Revenues: Evidence From a Sample of Lower Middle Income Countries," Applied Economics and Finance, Redfame publishing, vol. 6(1), pages 11-20, January.
    2. Mr. Alexander Pivovarsky & Mr. Benedict J. Clements & Mr. Sanjeev Gupta & Mr. Erwin H Tiongson, 2003. "Foreign Aid and Revenue Response: Does the Composition of Aid Matter?," IMF Working Papers 2003/176, International Monetary Fund.
    3. Workineh Ayenew, 2016. "Determinants of Tax Revenue in Ethiopia (Johansen Co-Integration Approach)," International Journal of Business, Economics and Management, Conscientia Beam, vol. 3(6), pages 69-84, 06-2016.
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    Keywords

    determinants; tax; revenues; ARDL; Jordan;
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