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Gov’t study underlines flaws in current tax system

By JT - Sep 04,2018 - Last updated at Sep 04,2018

AMMAN — The ratio of tax burden to gross domestic product in the Kingdom stood at 26.5 per cent in 2017, a government study has shown. 

The 26.5 per cent is broken down to include 17.3 per cent as indirect taxes, 3.7 per cent as direct taxes and 5.5 per cent as social security contributions, according to the study, released on Monday.

The tax burden, according to the study, includes the total direct tax revenues (income and real estate taxes), indirect tax revenues (sales tax, customs fees and ICT and fuel derivatives revenues) and social security premiums.

The study underlined structural faults in the tax system, where direct taxes constitute 24 per cent of the total tax revenue, while indirect tax revenues constitute 76 per cent of the tax burden.

The survey said that there are negative impacts of such defaults on tax justice, stressing the importance of reforming the direct tax to address these deformities, improve tax justice and establish a proper progressive taxation system. 

The study defined tax burden as the total levies paid by society in proportion to GDP. 

The survey is envisioned to contribute to making an information-based tax policy that results in a taxation system that stimulates growth, curbs tax evasion and ensures more justice among different strata of society. 

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