Evaluating the Impact of Direct Taxes on Economic Growth: Empirical Evidence from Jordan

Abstract

Existing literature reports contradictory findings about the impact of direct and indirect taxes on economic growth of different economies. In this regard, the objective of the current research is to investigate the impact of direct taxes on the economic growth of Jordan. GDP is considered an indicator of economic growth, so the impact of direct taxes is evaluated using the GDP of Jordan. The study has adopted a quantitative research approach using the autoregressive distributed lag (ARDL) technique. The findings of the study indicate that direct taxes (DT) have a significant negative effect on the economic growth of Jordan. This current research has significant implications for the Jordanian government and the policymakers of the Jordanian economy, and it is recommended that they should make significant modifications in levying direct taxes in a way that will contribute positively to the economic development of the country.