13-Jun-2019

Despite the government's pledges to the parliament and the private sector to approve the system of tax incentives for the industrial sector before the end of last year as an alternative program to exempt income tax from income tax, which has ended but has not yet complied with it, Delay.

 According to industrialists, the government's commitment to the existence of this system was in order to pass the draft income tax law currently in force without facing any objections by the economic activities, especially industrial ones, which threatened escalating procedures in the event of raising the income tax to 20% without any Other tax incentives.

 In turn, the Minister of Industry, Trade and Supply, Dr. Tarik Al-Hammouri, suggested that a system of tax incentives for the industrial sector will be finalized in September.

Al-Hammouri told Al-Ghad that the establishment of a system of tax incentives for the industrial sector comes as an alternative to the program of exempting export profits, which ended at the end of last year, pointing to the existence of consultations on this system with the industrial sector.

 Hammouri said that the government is committed to the preparation and activation of this system based on the agreement between the government and the House of Representatives, in addition to the government's keenness to support and strengthen national industries.

The previous government decided after a dialogue with the industrial sector more than a year, to provide a partial exemption for the sector within the current income tax law before approving it up to 70% of the net income of industrial enterprises from income tax as an alternative program to exempt export earnings, but the International Monetary Fund Refusal to include this in law.

 As a result, the income tax on the industrial sector was raised by 20% under the current law instead of 14% with the cancellation of all incentives previously granted to the industrial sector.

The Deputy Chairman of the Jordan Chamber of Industry, Hani Abu Hassan, the need to accelerate the adoption of a system of tax incentives for the national industry, in implementation of the agreement between the government and the House of Representatives and the private sector on this system.

Abu Hassan, chairman of the Irbid Chamber of Industry, said that the continuation of the national industry grants tax exemptions threatens the loss of important export markets because of the high costs and lack of competitiveness.

He pointed out that the sector now needs to stand by it more than ever before Facing.

Abu Hassan said that the chamber is in contact with the government and conduct dialogues on the system of tax incentives for the industrial sector, stressing that the system and bases and criteria for granting incentives are logical and uncomplicated and support the national industry.

He pointed out that many countries are keen to support their exports and industrial products to ensure their presence in the foreign markets through the provision of incentives are exempt from income tax and the reduction of sales tax and contribute to energy costs and social security deductions for employees in export companies, in addition to incentives to prepare for export and obtain certificates and incentives for marketing Participation in external exhibitions, support for proliferation and international presence of local factories.

The head of the Jordanian Exporters Association, Engineer Omar Abu Washah, said that the current government was very late in adopting an alternative program to exempt the profits of exports from income tax despite the existence of a tripartite agreement between the private sector, the government and the House of Representatives to approve the system before the end of last year.

He pointed out that the industrial sector presented perceptions on the criteria and bases for granting tax incentives to the Ministry of Industry, Trade and Supply for the preparation of the system, including that the granting of incentives is related to the employment of Jordanians or the quantities of export or research and development.

The President of the Assembly that leaving the industry without an alternative program weaken the national industry many export markets because of the lack of competitiveness, calling on the government to speed up the decision of this system in order to maintain the sustainability and continuity of national industry.  

He pointed out that Jordanian exports are the key to the Kingdom's economic growth, increasing production, providing more job opportunities for Jordanians, boosting the Kingdom's foreign currency reserves and attracting new investments.

He stressed the need to support the competitiveness of the national industry externally.

 The head of the Committee on Economy and Investment Representative, Dr. Khair Abu Sailek, said that the Council agreed with the government before the adoption of the Income Tax Law to find an incentive program as an alternative to the program of profits of exports of income tax.

He said that the absence of an alternative program to exempt the profits of exports from income tax harms the sector and carries additional financial burdens that would weaken the competitiveness of the sector locally and abroad, especially since the tax imposed on the sector is 20%.

He pointed to the existence of a meeting between the parliamentary committee and the Income Tax Department to consult on the provisions of the system of incentives tax, indicating that the system is issued by the Council of Ministers and not by the House of Representatives.

 The Chairman of the Committee expected that the tax incentives will be within clear terms and conditions and against developmental goals related to the employment rates and the factory's location, stressing the importance of supporting the national industry and enhancing the competitiveness of national products, both internally and externally.

 It is noteworthy that the industrial sector contributes about 24.7% of GDP and employs more than 175 thousand workers, while industrial exports contribute more than 90% of the total national exports worth up to 4.3 billion dinars annually.