Online businesses need ‘legislative stability’ to strive — sector leader

AMMAN — A sector leader on Thursday commended a Cabinet decision to exempt local online retailers from income tax and urged “legislative stability” regarding regulations governing the ICT industry.

The Cabinet on Wednesday decided to approve an amended bylaw to exempt online retailers’ profits from the 2017 income tax, the Jordan News Agency, Petra, reported. 

The decision was taken in order to cope with rapid developments in the world of information technology, by legislating for services provided on the Internet, Petra said. 

Nidal Bitar, the CEO of Int@j, the Information and Communications Technology Association, praised the decision. 

“It is a really good thing. In April 2016, the Cabinet offered incentives for the IT sector, by lowering the income tax rates by 20 to 5 per cent, and by exempting sales tax on production inputs by 16 to 0 per cent, and also exempting its customs to 0 per cent,” he told The Jordan Times on Thursday. 

Bitar said that, although the government had in the past raised income taxes, the cons superseded the pros. 

“The most important thing is not to change this regulation after a few months, because our problem is the instability of legislation and decisions,” he said, arguing that such “instability” would “negatively affect anyone who wants to start a business”.

“It’s better for them [the government] to set a specific time for any regulation .... We will be sure that it won’t change for five years and will make our calculations and work according to it,” Bitar explained.

When asked if any online-based company had relocated to a county with more favourable taxation of companies, Bitar said that Marka VIP, an e-commerce foundation, left Jordan “for good” and is now working in other Arab countries.

Bitar explained that some companies use the Kingdom as a base for such activities as development of software and resources, but primarily sell outside of Jordan. 

“Another company, which works as a gateway to other recruiting websites, was required by the Labour Ministry to present JD100,000 as bank guarantees, because they were informed that they worked as a recruiting website, when actually they were not; so they also left Jordan,” he stated.

Bitar also said that “Jamalon”, which is one of the “largest” book stores in the Arab region, has their software and resource development base in Jordan, but the selling and logistics sides of the business are based in the UAE.

The Information and Communications Technology Association of Jordan (Int@j), founded in 2000, is a membership-based ICT and IT Enabled Services industry advocacy, support and networking association, according to their website.