The Distributional Impact of Fiscal Policy in Jordan

2017 
This paper analyzes the impact of Jordanian government’s fiscal policies on poverty and inequality in the country. The CEQ methodology is applied o analize all the key fiscal policies employed by the government, such as direct taxes (personal income taxes); indirect taxes (sales taxes); direct transfers; indirect subsidies (subsidies for food, oil, electricity, and water); and in-kind benefits (benefits for education and health). The results indicate that the Jordan’s policies are mostly progressive and equalizing, primarily through direct taxes, direct transfers, indirect subsidies, and in-kind benefits. Moreover, the results show that the combination of tax and expenditure policies is poverty-reducing. However, the indirect tax system, in its current form, is slightly regressive and inequality-increasing, as the poor are paying a greater fraction of their income than the rich as sales tax.
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