Jordan Table of Contents
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