‘Hybrid car traders expected to lose JD5,000 per car for zero demand’

AMMAN — Traders are expected to incur losses of between JD4,000 and JD5,000 for each hybrid vehicle that arrived in the Kingdom in the first two months of 2018, a sector leader said.

Hybrid car buyers used to pay a reduced special sales tax of 25 per cent of the car's price instead of 55 per cent for regular fuel vehicles.

The government decided to cancel the exemptions in 2012, but the decision kept getting postponed until this year, when the government announced the cancellation of the exemptions and an additional tax on all types of cars ranging between JD500 and JD1,500, calculated on the basis of the car’s weight,. 

The traders have no choice but to suffer the loss incurred by liquidating the vehicles as there is no demand for hybrid cars, Jordan Free Zone Investor Commission President Nabeel Rumman told The Jordan Times.

Every September for the past six years, stakeholders have asked the government if the decision would be postponed again, and always receiving an answer before the end of the year.

"However, in September 2017, we received no answer until the end of December, when the government announced that it will cancel the exemptions and add a new tax depending on weight," Rumman claimed.

Some traders had already bought vehicles in November 2017 and received them in January and February 2018, the sector leader explained, adding that, if traders had known about the decision, they would not have made the purchases.

Traders used to import hybrid cars from the US and have them shipped to Jordan, which usually took around 60 days, he added.

Rumman noted that the sector leaders met with the government last month and presented a set of suggestions to “rescue the collapsed business”, and have received pledges to have their suggestions studied within a week.

The suggestions included lowering the clearance tax from 55 to 30 per cent, increasing the tax of scrapping old fuel-run cars and exchanging them for hybrid vehicles from 12.5 to 25 per cent, Abu Rumman said.

“This would double the public revenues from hybrid vehicles from JD110 million to JD220 million, in addition to the customs clearance tax which generates JD400 million," Rumman stressed, adding that no revenue will be created following the recent decision, which completely deterred residents from buying this type of cars.