Narrow Your Choices

Refine By Topic

Refine By Series

Refine By Language

Refine By Date

—

Refine By IMF Taxonomy

Refine By JEL Taxonomy

Refine by LOC Taxonomy

Refine By THEMA Taxonomy

  • Print
  • Save

Middle East and Central Asia > Jordan

You are looking at 1 - 10 of 27 items for :

  • Type: Journal Issue x
Clear All Modify Search
Cover IMF Working Papers
Personal Income Taxes in the Middle East and North Africa: Prospects and Possibilities
Mario Mansour
and
Eric M. Zolt
Personal income taxes (PITs) play little or no role in the Middle East and North Africa, often yielding less than 2 percent of GDP in revenue—with the exception of few North African countries. This paper examines how PITs have evolved in recent decades, and what they might look like in the next 20 years. Top marginal tax rates on labor and business income of individuals have declined substantially, a trend that mirrors reductions in advanced and developing economies. Taxation of passive capital income has changed very little, and the revenue intake from this source remains low throughout the region (less than 1 percent of GDP on average and concentrated in oil-importing non-fragile states). Social security contributions (SSC) have increased in importance in nearly all MENA countries, and some countries have introduced additional payroll taxes. The combination of reduced marginal tax rates, light taxation of income from capital and business activities, and increase of SSC, have resulted in income tax systems that create disincentives to work and incentives for informality, and contribute little to government revenue and income redistribution. Given differences in economic and political structures, demographics, and starting points, the path to PIT/SSC reforms will vary across the region. Countries with relatively mature PIT/SSC systems, where revenue performance has improved in the past two decades, will increasingly need to balance the revenue and equity objectives against effciency objectives (in particular labor market incentives and infromality). Countries with no PITs will have to weigh whether a consumption tax/SSC system that mimic a flat tax on labor income is sufficient to diversify revenue away from oil and whether to adopt PITs to address rising income and wealth inequality. Finally, fragile states, who face more political volatility and weaker fiscal institutions, will have to focus on simplicity of tax design and collection to be able to raise revenue from PITs.
Keywords:
Personal income taxes; social security contributions; payroll taxes; fragile and conflict states; Middle East and North Africa; Gulf-Cooperation Council; SSC reform; SSC system; revenue performance; PIT objective; PIT revenue; Personal income tax; Income tax systems; Income; Income and capital gains taxes; Corporate income tax; North Africa; Middle East; East Africa; Global
Cover IMF Staff Country Reports
Jordan: 2020 Article IV Consultation and Request for an Extended Arrangement under the Extended Fund Facility-Press Releases; Staff Report; and Statement by the Alternate Executive Director for Jordan
International Monetary Fund. Middle East and Central Asia Dept.
This paper presents Jordan’s 2020 Article IV Consultation and Request for an Extended Arrangement Under the Extended Fund Facility (ECF). Jordan’s IMF-supported economic reform program is anchored on structural reforms designed to spur growth by creating jobs—especially for women and young people—and reduce poverty. The Jordanian economy has continued facing significant challenges. Macroeconomic stability and external buffers have been preserved, but fiscal vulnerabilities remain. Structural reforms and continued fiscal consolidation efforts are critical to lift growth, reduce unemployment and bring debt on a downward path. Continued support from donors, particularly through concessional loans and budget grants, will be critical to help Jordan cope with humanitarian and economic needs. The coronavirus disease 2019 (COVID-19) outbreak poses significant risks to the program implementation. The authorities have implemented measures to help contain the impact of the pandemic; however, adjustments to the program modalities might be necessary considering the rapidly changing circumstances. Donor support through budget grants and concessional financing will be critical to help Jordan cope with the effects of the COVID-19 outbreak and the Syrian refugee crisis and to support program objectives.
Keywords:
ISCR; CR; fiscal consolidation effort; emergency outlay; economic reform program; COVID; authority; Jordanian authorities; program objective; job creation; Electricity; Arrears; Global; Tariffs
Cover IMF Staff Country Reports
Jordan: Second Review Under the Extended Arrangement Under the Extended Fund Facility, Requests for a Waiver of Nonobservance of Performance Criterion, an Extension of the Arrangement, and Rephasing of Access-Press Release; Staff Report; and Statement by the Executive Director for Jordan
International Monetary Fund. Middle East and Central Asia Dept.
This paper discusses Jordan’s Second Review under the Extended Arrangement under the Extended Fund Facility, Requests for a Waiver of Nonobservance of Performance Criterion, an extension of the arrangement, and rephasing of access. Discussions highlight that the Jordanian authorities have preserved macroeconomic stability, maintain a prudent monetary policy, and ensured a sound financial system. Jordan faces a challenging environment—including low economic growth, high unemployment, and elevated public debt—underscoring the importance of swiftly implementing policies and reforms to bring public debt on a downward path, boost investment and productivity, and enhance inclusive growth. The enactment of long needed growth-enhancing reforms is encouraging, including the secured transactions law, the bankruptcy law, and the business-inspections law. The international community has strongly supported the new government’s commitment to maintain the reform momentum, strengthen growth, and reduce public debt. The London Initiative in February 2019 has helped unlock essential budget grants and concessional financing to support the authorities’ reform program.
Keywords:
ISCR; CR; executive board assessment; electricity company NEPCO; NEPCO; reform effort; reform; access budget grant; reform public sector; telecommunication company; Income and capital gains taxes; Income tax systems; Arrears; Global
Cover IMF Staff Country Reports
Jordan: 2017 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Jordan
International Monetary Fund. Middle East and Central Asia Dept.
This 2017 Article IV Consultation highlights that Jordan has made significant progress since the 2014 Article IV Consultation but pressing challenges remain. The gradual pick-up in growth from 2010 to 2014 ended in 2015, with real GDP growth decelerating from 2.4 percent in 2015 to 2 percent in 2016. Labor market conditions have remained challenging, particularly for youth and women, with the unemployment rate increasing to 15.8 percent in the second half of 2016. Despite considerable progress and recent improvements, the outlook remains challenging. Real GDP growth is projected to reach 2.3 percent in 2017, while inflation is expected to stabilize at about 2.5 percent by year-end.
Keywords:
ISCR; CR; deposit dollarization; electricity tariff; IMF director; central bank of Jordan; staff appraisal; Oil prices; Tariffs; Credit; Global
Cover IMF Staff Country Reports
Jordan: Selected Issues
International Monetary Fund. Middle East and Central Asia Dept.
This paper discusses the Syrian Refugee Crisis (SRC) and conflicts in Syria and Iraq have weighed on investor sentiment, tourism, and exports but the influx of Syrians is likely to have increased aggregate demand. Labor market conditions deteriorated after the massive influx of refugees and nontradable prices accelerated. The balance of payment suffered pressures on the non-oil current account, owing to lower exports of goods and services and higher imports. The SRC has increased the direct fiscal costs persistently by above one percent of GDP, which could double after counting for quality and capital deterioration. The negative impact is decreasing as the influx of Syrian refugees slowed and the stock pushed up aggregate demand. The influx of more than 10 percent of Jordan’s original population may have certainly increased consumption, particularly, over time as the incomers settled and the likelihood of returning to their home country diminishes. Unemployment grew the most in governorates that host most of the refugees.
Keywords:
ISCR; CR; Jordan; cost; price; GDP; tax; private sector institution; oil price; SSIF asset portfolio; resource restriction; IMF commodity price; Payroll tax; Financial inclusion; Employment; Labor markets; Tariffs; Global; Middle East; Central Asia; Europe; Africa
Cover IMF Working Papers
The Design of Fiscal Reform Packages: Insights from a Theoretical Endogenous Growth Model
Andrew Hodge
This paper studies the impact on growth, welfare, and government debt of fiscal reform packages in a theoretical model drawing together three key features of the endogenous growth literature: (i) investment in technology (in the form of human capital) offsets diminishing marginal productivity of private capital, allowing for perpetual growth in output per capita; (ii) changes in investment behavior because of cuts to distortionary tax rates impact long-run growth; and (iii) public capital has a role influencing total factor productivity and growth. A quantitative simulation using reasonable parameter values suggests that modest capital and/or labor income tax cuts and public investment increases have significant positive effects on consumer welfare but small effects on per capita income growth, where fiscal costs are offset by reductions in unproductive government spending. Capital income tax cuts and public investment increases continue to boost welfare when offset by consumption tax rises (rather than spending cuts), although the welfare benefits of modest labor income tax cuts are outweighed by the costs of a compensating consumption tax increase.
Keywords:
WP; physical capital; Fiscal policy; Endogenous growth; physical capital goods; private physical capital; reform BGP; public capital; constant returns to scale; capital share; consumer welfare; Human capital; Capital income tax; Public investment spending; Personal income tax
Cover IMF Working Papers
The U.S. Oil Supply Revolution and the Global Economy
Mr. Kamiar Mohaddes
and
Mr. Mehdi Raissi
This paper investigates the global macroeconomic consequences of falling oil prices due to the oil revolution in the United States, using a Global VAR model estimated for 38 countries/regions over the period 1979Q2 to 2011Q2. Set-identification of the U.S. oil supply shock is achieved through imposing dynamic sign restrictions on the impulse responses of the model. The results show that there are considerable heterogeneities in the responses of different countries to a U.S. supply-driven oil price shock, with real GDP increasing in both advanced and emerging market oil-importing economies, output declining in commodity exporters, inflation falling in most countries, and equity prices rising worldwide. Overall, our results suggest that following the U.S. oil revolution, with oil prices falling by 51 percent in the first year, global growth increases by 0.16 to 0.37 percentage points. This is mainly due to an increase in spending by oil importing countries, which exceeds the decline in expenditure by oil exporters.
Keywords:
WP; Tight oil; shale oil; fracking revolution; oil price decline; oil supply; global macroeconometric modeling; international business cycle; oil exporter; oil-price shock; equity price; oil importer; error correction term; oil price data; oil-price environment; standard deviation; MENA oil importer; commodity exporter; price of oil; oil price environment; Oil prices; Oil; gas and mining taxes; Oil production; Vector autoregression; Global; Middle East; North Africa
Cover IMF Working Papers
New Energy Sources for Jordan: Macroeconomic Impact and Policy Considerations
Mr. Andrea Gamba
Jordan’s initiatives to reduce its energy dependency could have substantial macroeconomic implications, but will crucially depend on the level of international oil prices in the next decade. Significant uncertainties remain regarding the feasibility of the initiatives and their potential fiscal costs, including from contingent liabilities, could be very large. Given the lead time required for such major investments, work should start now on: (i) conducting comprehensive cost-benefits analysis of these projects; (ii) addressing the challenges arising from the taxation of natural resources; and (iii) designing a fiscal framework to anchor fiscal policies if revenue from these energy projects materializes.
Keywords:
WP; authority; cost; Jordan; monopoly power; energy strategy; energy; Middle East; fiscal policy; import bill; NEPCO cost recovery; import savings; maintenance cost; fuel mix; Oil prices; Oil; Imports; Renewable energy; Tariffs
Cover IMF Working Papers
Tax Policy in MENA Countries: Looking Back and Forward
Mario Mansour
This paper reviews trends in taxation and revenue in MENA countries over 1990-2012, with a focus on non-resource taxes. On average, non-resource revenues declined slightly, while resource revenues soared. Country experiences vary: rates of main taxes and their revenues tend to be higher in the Magreb than in the Mashreq, except for the value-added tax, where lower rates are associated with equal or higher revenue; most oil producers raise little tax revenues—generally less than 5 percent of GDP—and most have reduced them since the late 1990s. But there are similarities: unlike common experience around the world, income taxes (not indirect taxes) have partially compensated for lost revenue from trade liberalization; revenues from indirect taxes have remained stable; personal income taxes have played an unimportant role as a revenue tool; and fees and stamp duties are significant revenue sources. Looking forward, tax reform challenges will also vary across countries: the Maghreb needs to focus on efficiency-enhancing reforms, especially in capital income and consumption taxes; the Mashreq have some room to increase revenue; and, there are ample opportunities to improve equity and reduce complexity of tax systems in all countries. Finally, the recent decline in oil prices and revenues is a reminder that even resource-rich GCC countries need to lay the basis of a tax system for the future.
Keywords:
WP; excise tax; tax system; resource country; income tax; tax administration; tax revenues; resource revenues; tax reform; MENA; personal income; trade tax; building tax institution; tax competition; tax law; Corporate income tax; Tax incentives; Value-added tax; Taxes on trade; Maghreb
Cover IMF Staff Country Reports
Jordan: Selected Issues
International Monetary Fund. Middle East and Central Asia Dept.
This Selected Issues paper investigates the macroeconomic impact of the Syria crisis on Jordan. It is indicated that the crisis: (1) had an overall negative impact on measured output growth—although anecdotal evidence suggests possibly a positive impact on output in the informal sector; (2) contributed to inflationary pressures, particularly on rents; and (3) strained labor markets, mostly in the informal sector as refugees compete with locals for jobs. Although the crisis has put a strain on the external trade balance, the overall impact on the current account is not clear.
Keywords:
ISCR; CR; IMF staff estimate; labor market; Syria crisis; labor market outcome; policy setting; Syria conflict; Tariffs; Employment; Electricity; Labor markets; Unemployment rate; Europe; Middle East; East Asia; North Africa; East Africa; Asia and Pacific