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IMF delegates meet with independent pundits over tax system

By JT - Jul 18,2018 - Last updated at Jul 18,2018

AMMAN — A delegation from the International Monetary Fund (IMF) on Tuesday visited the Experts Society of Income and Sales Tax to discuss tax disputes and how best to develop the institutional capacity of the Income and Sales Tax Department (ISTD), the Jordan News Agency, Petra, reported.

President of the Society Hashim Hamza provided a summary of mission the society, which groups people who have competence and efficiency in the field of tax consultations, deep knowledge and experience in tax laws and ISTD-related regulations.

Hamza also explained the role of the society in cooperating with the relevant official authorities and assisting them to draft laws, regulations and instructions to improve the tax system in general and regulate the profession of tax consultations in particular in order to preserve the rights of all parties.

For his part, Keith Carter, the head of the delegation and the IMF representative, asked on the possible means to address these conflicts and develop the capacity of taxation agencies. 

He also asked about the causes that have led to the tax disputes, the solutions needed to solve them, and suggestions for improving the performance of the ISTD.

The president of the society said that the controversies between ISTD and taxpayers are rooted in  “ignorance” of the latter in the law, the poor training of some employees of the department, the existence of ambiguity in some articles of the law that could be interpreted differently and the lack of trust between the two sides

Hamza underlined the need to provide technical and financial support to the ISTD, increase incentives for employees, improve the work environment, provide effective training courses and delegate broader powers to the tax administration to settle disputes, among others.

Hamza stressed the importance of giving taxpayers sufficient time to submit their payments data and documents to reduce the frequency of cases referred to the tax court.

Hamza added that it is necessary to have a specialised body, whose decisions are binding for both the ISTD and taxpayers, to have the final say in the interpretation of ambiguous and controversial legal provisions.

A tax law drafted by the government of Hani Mulki, which expanded the taxpayer base and toughened tax evasion penalties, triggered public anger earlier this year and led youth in Amman and other cities to demonstrate in rejection of the law.

The government, as a consequence resigned and its successor, led by Prime Minister Omar Razzaz is working on a new version of the law. 

Tax reform is a requirement by the IMF to facilitate a $723 million Extended Fund Facility  reached with the lender in 2016.

 

 

 

 

 

 

 

 

 

 

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Comments

Once again the problem with the erstwhile defunct draft income Tax law wasn't with the content itself or with the citizenry discernability or lack thereof of the ream of the articles, it was with the exemptions that represented a huge lifeline for the average middle-class citizen. Eliminating the exemption and lowering the income tax bracket from JD 12000 to JD 6000 caused the last nail to be driven down the coffin of the income tax law. Now that the law has already been withdrawn and a new one is being considered the new government needs to shift the Tax burden from consumption and wage earners to corporate profits, dividends, and yields. The wage earner is already overtaxed by the sales tax and other governmental taxes and fees, they can't afford to have any more money levied out of their wages. The average citizen doesn't really care about becoming a tax expert all they care about is how much money is coming out of their pockets towards the various tax forms.IMF personnel should spare some of their precious time to meet not only with the country's economic pundits but rather set up a town hall meetings to listen to the citizens' fears and concerns and reservations regarding the entirety of the Tax system and not only that what was tailored for their income.

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