Jordan’s lower house of Parliament has approved a new International Monetary Fund (IMF)-backed tax law, after Prime Minister Omar Razzaz warned the country would pay a heavy price if the Bill was not passed.
The legislation has also been agreed by the Senate's Finance and Economy Committee, which has recommended that the Senate to endorse its decision. The changes are aimed at boosting the economy as Jordan seeks to lower its huge debts through a combination of austerity measures and an IMF bail-out, according to the Borneo Post.
Prior to the vote, the Prime Minister warned deputies that the country would have to pay even higher interest rates on its substantial foreign debt if Parliament failed to approve the legislation. He added that the law promoted social justice by targeting the wealthy and would take on long-term corporate tax evaders.
But opposition deputies argue it will hurt the country’s already stagnant economy and reduce middle-class incomes.
The new law raises the income threshold from the previously proposed JD18,000 (US$25,370) to JD20,000 (US$28,189) for families, and from JD9,000 (US$12,685) to JD10,000 (US$14,095) for individuals. In addition, Asharq Al-Awsat reported, Parliament determined that those whose income annual income exceeded JD1 million would be subject to an income tax rate of 35%.
But Members of Parliament also approved the doubling of VAT exemption to JD2,000 (US$2,819) instead of JD1,000 (US$1,409) in the government’s proposed Bill for families and individuals, provided that such expenses were also covered by similar Bills for health, education, loan interest or the creation of an Islamic finance and investment instrument.
The tax Bill sparked controversy in Jordan last June after the government resigned following protests across the country. The situation led to al-Razzaz being appointed Prime Minister and the law being withdrawn from Parliament for amendment.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
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Jordan’s lower house of Parliament has approved a new International Monetary Fund (IMF)-backed tax law, after Prime Minister Omar Razzaz warned the country would pay a heavy price if the Bill was not passed.
The legislation has also been agreed by the Senate's Finance and Economy Committee, which has recommended that the Senate to endorse its decision. The changes are aimed at boosting the economy as Jordan seeks to lower its huge debts through a combination of austerity measures and an IMF bail-out, according to the Borneo Post.
Prior to the vote, the Prime Minister warned deputies that the country would have to pay even higher interest rates on its substantial foreign debt if Parliament failed to approve the legislation. He added that the law promoted social justice by targeting the wealthy and would take on long-term corporate tax evaders.
But opposition deputies argue it will hurt the country’s already stagnant economy and reduce middle-class incomes.
The new law raises the income threshold from the previously proposed JD18,000 (US$25,370) to JD20,000 (US$28,189) for families, and from JD9,000 (US$12,685) to JD10,000 (US$14,095) for individuals. In addition, Asharq Al-Awsat reported, Parliament determined that those whose income annual income exceeded JD1 million would be subject to an income tax rate of 35%.
But Members of Parliament also approved the doubling of VAT exemption to JD2,000 (US$2,819) instead of JD1,000 (US$1,409) in the government’s proposed Bill for families and individuals, provided that such expenses were also covered by similar Bills for health, education, loan interest or the creation of an Islamic finance and investment instrument.
The tax Bill sparked controversy in Jordan last June after the government resigned following protests across the country. The situation led to al-Razzaz being appointed Prime Minister and the law being withdrawn from Parliament for amendment.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
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