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PM reasserts new tax law will not affect middle class

Critics among lawmakers gearing up for showdown as House receives bill

By JT - Sep 11,2017 - Last updated at Sep 11,2017

AMMAN — Prime Minister Hani Mulki on Monday said that reconsidering the Income Tax Law would not affect the exemptions given to vulnerable segments, the Jordan News Agency, Petra, reported.

During a discussion panel organised by the Jordan Strategies Forum, Mulki said that the middle class will not be affected by amendments of the taxation system, which, he noted, have not been decided yet, and the government will study other measures to prevent tax evasion and improve collection efficiency.

He noted that a comprehensive discussion of the law will be conducted, stressing that the law must include deterring penalties to prevent tax evasion.

"The government's message to the International Monetary Fund [IMF] was that the law should be reconsidered without affecting the middle class and the segments that are exempted under the current law", said the premier, in reference to correspondence with the fund, which has set tax reforms as criteria of Jordan’s economic correction programme the IMF supervises. 

Mulki stressed the importance of addressing the tax imbalances and rationalising exemptions that are given to investors, noting the low revenues as a result of existing tax incentives.

Mulki’s remarks came as a heated debate is under way over the new version of the law, which has yet to be finalised by the Cabinet. 

On Monday, a parliamentary bloc joined a chorus of critics of the expected government’s move. Spokesperson of Wifaq (Concord) Bloc Mutaz Abu Rumman said in a statement that the group would work to block any tax legislation that might affect the low- and middle-income segments.  

On the financial discipline and the partnership with the private sector, Mulki said that the government would not take any measure before reviewing the relevant studies, meeting with leaders of the concerned sectors and launching a national dialogue to ensure that the public interest is well served.

He said that the public spending will be in line with the Economic Growth Plan 2018-2022, which included capital projects worth JD9.5 billion.

As for the public-private sectors projects, Mulki stressed that the government has approved ten projects with a cost of JD200 million.

The government also plans to reframe the Vocational Training Corporation in cooperation with the private sector to address the labour market’s needs, Mulki said, adding that the government would continue including more age categories in the health insurance.

In regard of exporting to Iraq after reopening the Turaibil border crossing, Mulki said that the process would first be limited to unloading goods at the crossing until security is ensured for Jordanian trucks to enter Iraq.

He stressed that bilateral agreements with other countries are not imposed on Jordan and work should be focused on producing goods with high demand on the markets of the countries that have free trade agreements with Jordan.

During the panel, the premier outlined the Economic Growth Plan 2018-2022, which included 19 projects.

He noted the measures that were taken by official institutions to implement the plan including the Central Bank of Jordan (CBJ), which allocated JD1 billion for banks with low interest to be reloaned to certain sectors, established an investment corporation with a capital of JD125 million, and established the Innovative Startups Fund in cooperation with the World Bank at a cost of JD100 million, in addition to allocating JD100 million for the Jordanian Export Guarantee Programme.

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