Economic Sectors Value Added and Tax Revenues: Empirical Evidence from Jordan

Abstract

The current study investigated the impact of economic sectors value added share of GDP represented by construction sector value added share of GDP (CONS), industrial sector value added share of GDP (INDS), mining and quarrying sector value added share of GDP (MINQ), Agricultural sector value added share of GDP (AGRIC) and services sector value added share of GDP (SERVICES) on tax revenues (TAX) in Jordan for the period 1990-2016. The study used unit root test, co-integration test and multiple linear regression model to examine the study hypotheses. The study found that there is a positive and significant impact of the construction sector value added share of GDP (CONS), industrial sector value added share of GDP (INDS), mining and quarrying sector value added share of GDP (MINQ) and services sector value added share of GDP (SERVICES) on tax revenues (TAX) in Jordan for the period 1990-2016. While it found that the agricultural sector value added share of GDP (AGRIC) has a negative and significant impact on tax revenues. The study found that economic sectors value added share of GDP represented by construction sector, industrial sector, mining and quarrying sector, agricultural sector and services sector are good determinants for tax revenues in Jordan.