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Reformulating the Tax Incentive Program in Jordan: Analysis and Recommendations


  • Duanjie Chen

    () (University of Toronto)


The paper summarizes the main weaknesses of Jordan’s current incentive program. Because of these weaknesses, Jordan’s long history of investment incentives has proven not to attract significant capital investment in areas favored by government. Instead, these measures have simply eroded the base for tax revenue. The paper compares Jordan to its major competitors for foreign investment with the region, namely Egypt, Israel, Tunisia, and the United Arab Emirates (UAE)/Dubai. The paper makes four recommendations which seek to eliminate the tax distortions of current investment incentives, maintain Jordan’s tax competitiveness in the region, remove unnecessary administrative and compliance costs, and improve the government’s capacity to generate revenue. These recommendations are consistent with the anticipated, comprehensive tax reform that will lead to a fully modernized tax system in Jordan.

Suggested Citation

  • Duanjie Chen, 2004. "Reformulating the Tax Incentive Program in Jordan: Analysis and Recommendations," International Tax Program Papers 0412, International Tax Program, Institute for International Business, Joseph L. Rotman School of Management, University of Toronto, revised Sep 2004.
  • Handle: RePEc:ttp:itpwps:0412

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    Cited by:

    1. Tayem Ghada, 2015. "Does Foreign Ownership Increase Firms’ Productivity? Evidence from Firms Listed on Amman Stock Exchange," Review of Middle East Economics and Finance, De Gruyter, vol. 11(1), pages 25-54, April.

    More about this item


    Jordan; tax incentives; tax competitiveness; foreign investment;

    JEL classification:

    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

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