Sunday, 04 June 2023 10:58 GMT

Jordan- Tax Amendments: This Shall Not PassBy Jumana Ghunaimat

(MENAFN- Alghad Newspaper)

The government intends to push for new amendments to the income tax law.

Of course, this isn't new to us, we all knew this day would come.

When Dr Abdullah Nsoor's government told us about these amendments, back in 2014, it was momentously opposed by the public and parliament.

Back then, it was considered an indicator of legislative instability.

More so, recurrent governments over the years have all sought to pass amendments to the income tax legislation.

For years our government have been complaining over the fact that most Jordanians do not pay income tax; more 95 per cent of Jordanians are excluded from the taxable base.

In the meantime, it is no secret that these amendments were proposed to help the government meet the requirements set by the International Monetary Fund (IMF).

The IMF has been press Jordan to pass these amendments for years, hoping to address one of the economy's main imbalances, according to the Fund.

Meanwhile, the government has failed to address and contain tax evasion, and scandalously, due to the lack of commitment, not to mention the shortcoming instruments used to attain this goal.

We know well that the Treasury has always leaned more on the committed sectors and individual, who without fail pay their dues.

Shamelessly, the government has been pushing to increase taxation to a breaking point, wherein people and businesses would be unable to make do, let alone pay more taxes.

Recurrent and unnecessary tax hikes in Jordan have hurt businesses and eroded profitability in various sectors.

On the other hand, officials and experts know very well that this focus on increasing tax revenues and partial reforms is insufficient.

The entirety of the taxation system needs to be reformed, holistically, to ensure a more effective and equitable structure, especially when it comes to taxing income.

Income taxation, as well as the whole of the principle of taxation, is intended to advance equitable redistribution of wealth and development.

Equitable is the keyword in this regard; hence, just redistribution requires just excision.

Meaning that in order to justly distribute revenues from taxation, the excision of taxes in the first place need to be fair.

We need to revisit all payable taxes in effect, from sales taxes to customs, notwithstanding, in order to arrive at an effective, functional, all-encompassing taxation system.

Accordingly, we need to weigh all these taxes payable on one side against the average income of the Jordanian citizen.

Afterwards, we can calculate net Treasury and citizen revenues after taxation, in light of the above figures, so as to be fair.

Moreover, we need an open mind to lead a revolution against the status-quo; we must obliterate standing legislations in regards to tax evasion and push for bold countermeasures.

It would also serve us well to open a new page with tax evaders. If we headstrong come after them, giving them no other way, they will never stop evading taxes.

Tax evaders will not offer to pay their dues out of the goodness of their hearts. They will continue playing out their games with the quickness which has cost the Treasury so much over the years.

Notably, the very core and principle of income taxation is political, not financial.

The government, typically, seeks always to avoid political debate and confrontation.

Amending taxation legislation should be a matter of public opinion and interest, instead of moving about it with such secrecy and ambiguity.

Taxation is an issue which affects most Jordanians and erodes their incomes.

Hikes in taxation will only destabilise the middle class further, penetrating their last line of defence against the ever so skyrocketing costs of living on a fixed income.

The middle class is struggling only to not slip into poverty, and barely so!

Naturally, such a sensitive issue will take such a political discourse, because the middle class is the catalyst of development and growth, not to mention change.

Eroding the middle class, which has sustained many recurrent blows over the last few years has left it all but defenceless in the face of intolerable economic peril and challenges.

To sum it all up, protecting the middle class is crucial for the stability and security of our society.

Governments can no longer turn the blind eye to the pressures this segment of society has endured, from the deteriorating level of public services to the erosion of income.

A significant part of the Jordanian's income is spent on basic education, health, and transportation services, all due to the absence of decent government alternatives.

This article is an edited translation of the Arabic version, published by AlGhad.


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