Tax Policy and Its Impact on Economic Growth in Jordan for the Period 2000-2022 Tax Policy and Its Impact on Economic Growth in Jordan for the Period 2000-2022

Abstract

This study explores the pivotal role of tax policy in economic growth. Through a wide-ranging review of existing literature and empirical analysis, the study examines how different tax structures and policies affect economic activity, productivity and comprehensive development. The study identifies the mechanisms through which tax policy affects key economic indicators such as gross domestic product. The study examines the contradictory effects of different types of taxes for the case under study, which is Jordan. Among the many variables that can be included in building the standard model for measuring the impact of tax policy on economic growth, (six) variables were selected to represent the independent variables in the model (tax revenues at current prices of local currency, taxes minus support on products at current prices of local currency, taxes on goods and services, value added of industry and services%, taxes on international trade at current prices of local currency, taxes on income, profits and capital gains at current prices In local currency, taxes on goods and services at current local currency prices), the findings suggest that well-designed tax policies can stimulate economic growth by enhancing resource allocation, encouraging investment, and fostering innovation, while, conversely, poorly structured tax systems may hinder growth by creating economic distortions and disincentives.