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Jordan Revenue and Taxation
Customs revenues from tariffs and a 15 percent across-the-board
import surcharge traditionally have been the largest sources of
domestically generated revenue, accounting for almost 40 percent of
government income before foreign aid receipts in 1985. Because of
a narrow tax base and the granting of numerous exemptions, direct
taxes on income have made only a small contribution to government
revenue. In 1985 direct taxes accounted for 13 percent of
government revenue, or 4 percent of GDP. Various indirect taxes,
however, were relatively high, so that indirect and direct taxes
combined represented 14 percent of GDP. Jordan's revenue policy
dovetailed with its investment policy. High customs charges and
indirect taxes were designed to stifle consumer spending, while low
personal income taxes and even lower business taxes were meant to
channel the resulting savings to investments. For similar reasons,
domestic borrowing was limited. In 1986 outstanding internal public
debt was only JD419 million (see
table 8, Appendix).
Total 1989 revenue was projected at JD913 million. Customs
revenues were expected to contribute JD155 million, but it was
possible that the government import ban on luxury goods would slash
this figure. Other local revenue generated through direct and
indirect taxes was expected to contribute JD392 million. Foreign
aid was expected to contribute JD225 million, the same level as
projected for 1988, although actual aid disbursed to Jordan in 1988
amounted to JD164 million. Development loans were expected to
contribute another JD103 million to 1989 revenues.
Data as of December 1989
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