Tuesday 22, May 2018 by Kudakwashe

Jordanian cabinet finalises income tax bill

 

The Jordanian cabinet has endorsed the income tax draft law and will refer it to the Lower House to move it through constitutional channels towards enactment.

The Government reasserted that it was earnestly carrying on with economic reforms according to schedule, announcing the development on the eve of an expected visit by the International Monetary Fund (IMF) to review progress made under an economic correction plan.

The proposed law is expected to be debated by the House after Ramadan during an extraordinary session, pending a decree by the King. 

The Government has already made adjustments to the sales tax and subsidy system, an unpopular move officials have stressed is vital to salvage an economy that has been struggling amid regional instability, a huge refugee influx and dwindling international support. 

As quoted in the Jordan Times, Finance Minister, Omar Malhas said that the bill mainly focuses on three aspects: improving tax collection, curbing tax evasion and boosting tax revenues, which are expected to increase by JOD 300 million annually.

Malhas noted that the past two weeks witnessed intensified consultations with all stakeholders to discuss relevant issues, adding that some 60 to 70 per cent of feedback given on the initial draft was taken into consideration when finalising the draft law. 

The bill subjects capital profits to 15 per cent tax regardless of the sector.

The draft law also exempts venture capital funds, as defined under the Companies Law, from taxes so as to encourage the establishment of such funds to contribute to rescuing stumbling businesses.

Amendments to the law add the Jordan Integrity and Anti-Corruption Commission as one of the institution that can look at data gathered by the tax investigation unit created under the bill. 

Furthermore, the bill distinguishes between intentional tax evasion and unintentional mistakes, stipulating that only the judiciary can indict suspects of tax evasion.

The bill re-labels tax evasion from a misdemeanour to a felony with harshened penalties of imprisonment and financial fines.

  

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