The Effect of Direct Taxes (Income and Profit) On Gross Domestic Product Of Jordan

Saud Al-tayeb

Abstract


The main aim of this study is to investigate the effect of direct taxes on the Gross Domestic Product (GDP) during the period (1976-2010).
In order to achieve the above object the VAR (Vector Auto-Regression) with two variables which are income and profit tax, has been applied to the data. The Augmented Dickey Fuller test indicates that both variables of the study are stationary at first difference. Whereas, the Granger Causality test suggests that there is causal relationship with two direction from GDP to tax and from tax to GDP.
The variance decomposition analysis and impulse response indicate that the direct taxes have positive effect on the Jordanian Gross Domestic Product.

Keywords


Direct Taxes (Income and Profit) GDP.

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