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Gov’t reduces sales tax on 61 essential commodities

Exemption on e-cars extended; terms set for new oil refineries

By JT - Jan 09,2019 - Last updated at Jan 09,2019

AMMAN — The Cabinet on Wednesday decided to slash the general sales tax on 61 essential commodities down to 4 per cent from 10 and 16 per cent.

The decision will go into effect as of the date of publication in the Official Gazette, a statement by the Prime Ministry said, adding that the move is meant to ease economic hardships on citizens and help balance the tax burden.

The list includes foodstuffs such as canned meat, fish, cheese, pasta, vegetables, fruit, table salt and tomato paste, in addition to pencils, among others, according to the statement.

A new controversial Income Tax Law went into effect at the beginning of the year, after it was promoted by the government as an answer to an unjust tax system.

Last year, the former government increased the general sales tax and scrapped a subsidy on bread as part of a three-year fiscal plan agreed with the International Monetary Fund, which aims to narrow a yawning budget gap and cut public debt exceeding $37 billion, equivalent to 94 per cent of the gross domestic product.

The decision was taken yesterday when Prime Minister Omar Razzaz was heading a mission in Washington, DC. 

Official meetings of Jordan’s economic-ministerial delegation had kicked off the day earlier, with the aim of acquainting international and US institutions with the Kingdom’s economic growth programme.

The delegation is seeking support from the US administration and international organisations in preparation for the upcoming London conference to support Jordan’s economy and investment.

Also during the Cabinet’s meeting yesterday, chaired by Deputy Prime Minister Rajai Muasher, the council decided to keep the 100-per cent exemption on electric cars valid till the end of April, applicable only to car stocks at free zones and customs departments and those being shipped to the country.

To benefit from the waiver, dealers should submit documents proving that the purchase took place before the end of the year. 

The exemption had expired on December 31, and a 25 per cent levy was imposed on e-cars, according to the statement.

The Cabinet also approved the eligibility criteria for companies interested in building and operating oil refineries in the Kingdom, after the monopoly status of the Jordan Petrol Refinery Company expired last April. 

Eligible companies should prove financial and technical adequacy and accept the conditions that the government will not guarantee the availability of raw oil and the fact that there are companies in the market that are allowed to import fuel.

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