Around 300 essential or food-related goods and services benefit from full exemptions or reduced tax rates, targeting the items most consumed by low- and middle-income groups.
اضافة اعلان
The government has adopted the principle of not imposing new taxes or increasing current ones.
Input tax deduction and tax credit mechanisms indicate that sales tax in Jordan does not burden production costs.
Dr. Hussam Abu Ali, Director General of the Income and Sales Tax Department, stated that the government has adopted a tax reform plan based on the principle of not imposing any new taxes or increasing existing tax rates. Instead, the plan focuses on enhancing voluntary compliance among taxpayers, expanding the tax base, improving auditing and inspection efficiency, combating tax evasion, and addressing loopholes that allow tax avoidance.
Abu Ali also referred to discussions regarding the restructuring of the tax system and the need to implement a progressive income tax, along with calls for tax reform based on transparency and disclosure. He emphasized that the government’s reform plan clearly follows the principle of not introducing new taxes or increasing current rates while relying on voluntary compliance, broadening the tax base, improving audit efficiency, combating tax evasion, and closing avoidance gaps.
He explained that the tax reform program includes a set of measures aimed at improving the contribution of direct taxes to total tax revenue, helping to correct imbalances between direct and indirect taxes.
Abu Ali noted that implementing the first phase of these reforms improved direct tax revenues and increased their share of total tax revenue. Reforms in direct taxation were based on progressive tax principles, increasing the number of progressive tax brackets to ensure economic benefit and fairness among taxpayers.
Regarding claims that sales tax constitutes a burden on production costs, Abu Ali clarified that, under Jordan’s tax system, the application of input tax deduction and tax credit mechanisms demonstrates that sales tax does not add to production costs. Producers can deduct sales tax paid on inputs from the tax due on the final product, effectively nullifying its impact on production costs. The legislation allows such deductions, similar to the practices under the value-added tax system, ensuring sales tax does not count as a cost element.
Abu Ali also addressed claims that sales tax is paid primarily by the poor and middle-income groups, stating that this is an inaccurate and superficial conclusion. Jordan’s sales tax legislation explicitly includes schedules protecting low- and middle-income groups, which can be referenced in the official tax tables.
He emphasized that over 300 essential and food-related goods and services benefit from either full exemptions or reduced tax rates, representing the items most consumed by low- and limited-income households.
Thus, Jordanian law has established a legislative framework to protect low- and middle-income groups, ensuring that these essential and food items do not impose a tax burden on these populations.
Abu Ali also noted that taxes are imposed on harmful, luxury, or relatively important goods to achieve both economic and social objectives in addition to fiscal goals.
Consequently, the claim that the poor and rich pay the same taxes is unfounded, as the tax legislation already provides the necessary protections.
