Draft income tax bill clouds optimism at conference to beef up investments

AMMAN – The government and the private sector are pinning hopes on the new investment law for whetting the appetite of Jordanian and foreign investors. 

Officials and businesspeople, including Arab investors, gathered on Monday at the 1st National Conference for Investment to explore ways to increase capital flows and obstacles hindering the development of the business environment in the Kingdom. 

Industry, Trade and Supply Minister Hatem Halawani described the new investment law, endorsed by the Parliament just few months ago, as a modern bill that would attract local, regional and international investors to benefit from wider incentives and easier measures to start new businesses. 

The new law merged all entities that used to be in charge of investment issues in one agency, the Investment Commission, and also removed investment obstacles, he said, adding that under the legislation an investment council will be headed by the prime minister to oversee the development of businesses and to guarantee more transparency. 

"Investors will no longer wait for long periods to have their projects approved," Halawani stressed, adding small and medium businesses will also benefit from tax exemptions and incentives under the new bill. 

Former finance minister Mohammad Abu Hammour said Jordan's economy needs to return to pro-2008 growth figures of 6 per cent to 7 per cent to create more jobs for Jordanians and to reduce poverty. 

"This can be achieved through large investments," he added, but questioning if the new investment law was enough to stimulate the appetite of investors at a time when a draft income tax law, currently at the Lower House for deliberations, is a concern for businesspeople.

Jordanian Businessmen Association President Hamdi Tabbaa called on the government to withdraw the income tax bill and to re-draft it in consultation with the private sector. 

"The income tax bill is a major concern for the private sector," Tabbaa said. 

The controversial draft law imposes 35 per cent tax on several sectors such as the telecommunications, banking and insurance. 

Taxes in Jordan are higher than regional countries, Tabbaa added, noting that the new investment law in addition to the Kingdom's stability and strategic location should be an advantage for investors. 

Amman Chamber of Industry President Ziad Homsi said the private sector was eagerly waiting for approving the new investment law as it merged government investment bodies and laws in one entity, adding that instability in economic legislation over the past years have negatively affected the performance of businesses. 

Halawani said a one stop window will be available for investors with the help of representatives from concerned government agencies, who will have authority to make decisions. 

The event was organised by the National Association for Investor Protection.