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ICT sector pins hope on economic plan to address woes

By Mohammad Ghazal - Aug 26,2014 - Last updated at Aug 26,2014

AMMAN — Jawad Abbassi, chairman of the ICT Association of Jordan (int@j), has blamed government policies for the ICT sector’s recent failings.  The sector, which contributes approximately 14 per cent annually to the gross domestic product, witnessed several setbacks over the past few years due to a variety of issues.

“The ICT sector is one of the only sectors that does not need direct government intervention or assistance to succeed,” Abbassi said. “It is making great successes but, unfortunately, many of the decisions taken by the government over the past few years have had a negative effect on the sector’s income.” 

He attributed the loss to a lack of financial backing to implement infrastructural projects, noting that Jordan’s ranking among regional countries in providing e-health and e-education also affected the overall growth in the sector.

In addition, Abbassi cited the inconsistent legislation and the government’s “abrupt decisions” to increase taxes on the telecom sector, increase income tax on companies working in the field and the lack of public-private partnerships as contributing factors that have greatly harmed the sector.

“ICT lost several opportunities as a result of these issues. For example, the IT sector succeeded in creating 350 jobs over the past year but after the government increased taxes on mobile subscriptions and electricity fees on telecom companies, 320 people have lost their jobs in the sector,” Abbassi said.

Revenues of the country’s telecom sector have dropped by 9 per cent since the government doubled taxes on cellular phones and mobile subscriptions, a representative of the sector said on Sunday.

A study conducted by the country’s mobile operators showed that since the introduction of extra taxes on mobile calls and services, profits declined by 30 to 40 per cent. In July 2013, the government increased the special tax imposed on mobile phones from 8 per cent to 16 per cent and the tax on mobile subscriptions — both prepaid and post-paid — from 12 per cent to 24 per cent.

For the ICT sector to succeed and continue to grow, there is a need for the 10-year economic plan, which is being drafted by the government, to address the challenges currently facing the ICT, Abbassi said. “This needs to be done in partnership with all stakeholders,” he added.

The chairman also expressed fears of migrating businesses, noting that “inconsistent legislation and a lack of clarity about the future of the sector is a major concern for investors in the field of ICT”. 

“Many Jordanian investors now prefer to register their companies abroad rather than in Jordan due to fear that legislation might change anytime,” he said. 

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