Car dealers alarmed by ‘surprise’ tax increase on electric vehicles

By Ahmed Bani Mustafa - Jan 06,2019 - Last updated at Jan 06,2019

The government reached a compromise with stakeholders last June to set the tax on hybrid cars at 30 per cent, however some said they were taken by surprise when the government recently announced a 25 per cent tax on electric vehicles (AFP photo)

AMMAN — The government has increased the customs-clearance tax on electric vehicles (EVs) without referring to or notifying dealers far enough ahead of the decision, stakeholders have recently said.

The customs tax on EVs has been increased from zero to 25 per cent as of January 1, which has been described by traders as another “blow” to the already deteriorating automobile sector.

After announcing a clearance tax increase of 50 per cent in 2012, the government reached a compromise with stakeholders last June to set the tax on hybrid cars at 30 per cent, with a gradual increase of 5 per cent every year until 2021. However, stakeholders said they were not aware of any new taxes on EVs.

Haitham Qteishat, deputy president of the Jordan Free Zone Investor Commission (JFZIC), said that the sales of hybrids and EVs should be encouraged as they are economic and eco-friendly.

The number of customs-cleared gasoline and hybrid cars in 2018 dropped by 27,000 compared with 2017, according to statistics from the JFZIC, which added that 2018 witnessed the clearance of 44,000 total vehicles compared with 71,000 the previous year.

Also in 2018, the government added a weight tax vehicles costing between JD500 to JD1,500.

Car traders have expressed concern over the decisions, which they said harmed the market and the National Treasury, as they have led to a drop in sales they claimed.

Qteishat said that traders are currently discussing the issue with MPs to find a “way out”.

The sector is already facing serious challenges, including the halt of vehicle exports to neighbouring countries whose borders are closed and customers’ low purchasing power, Qteishat told The Jordan Times.

“We did not know that a tax would be added on EVs until December 31, 2018,” he added.

He charged that the sector would witness recessions due to the low demand, which would lead the closure of many car exhibitions and the release of workers, noting that the sectors employs more than 20,000 people.

Rate