Amman - In a statement during a lecture at the Jordan Media Institute (JMI), Income and Sales Tax Department Director General, Hussam Abu Ali, said that the implementation of the new tax law has showed positive results on both collecting taxes and on relieving the burdens of tax evasions, adding that if such corrective measures were not taken, Jordan’s state of economy would have required borrowing money and accordingly resulted in more financial and economic problems.
Abu Ali said that the refugee crisis and the downsizing of aid funds “have negatively affected the economic growth and caused a deficit in the general budget and an increase in the public debt. This required a reform action plan which had to include the Tax Law. The government conducted two studies; one of which was about tax evasion, while the other was regarding loopholes that tax evaders used to take advantage of. The two studies showed that only 5% of the population pay their income tax – a rate that is very low.”
Abu Ali stressed that the reason behind this was a structural flaw that had “almost 75% of taxes paid by citizens under the category of “indirect tax” – which is associated with goods and services, and that the remaining 25% of “direct tax” was a very low percentage that required reform.” As result, the reform had to include improving tax management, increasing tax base, and putting an end to tax evasion”.
As part of the new terms introduced by the Tax Law, assessors were substituted by tax auditors in order to better govern the authorities given to employees responsible for income tax evaluations. The new law has also contributed to the activation of the constitutional law regarding “progressive taxes” as well as handing all tax violations and tax evasions issues to the judiciary system.
The Director General also clarified that the new tax law “is fair to working women, as it gives them similar opportunities as men.” The reform came to the advantage of women workers, he underlined.