11% more taxes collected this January than the same month last year

Too early to judge tax-collection reforms, say economists

1. ITSD (Petra)
(Photo: Petra)
AMMAN — Director-General of Income and Sales Tax Department Hussam Abu Ali said recently that the department collected some JD528 million in income and sales taxes in January; the total for the same month last year was JD465 million.اضافة اعلان

The 11-percent increase this year is “clear evidence of the success of attempts to address the problems afflicting the tax system,” Abu Ali contended.

According to economist Zyan Zawaneh, "the successful improvement of the tax system is a marginal reason for increasing the tax collection rate, but cannot be a major one".

Zawaneh believes that the beginning of the year may have been a period of breakthrough after the closures of 2020 that left a mark on the economic situation.

The year, however, started with the backlog of the previous year, he said.

“When Omicron appeared, government actions and official and unofficial media discourse played a significant role in raising people's fears. That, in addition to economic fatigue and confusion, which is now beginning to appear clearly, attempts to establish projects, the steady return to jobs. ... This all started to emerge suddenly as a result of weak economic policies as a whole,” he said.

Zawaneh said that a follow up on the first quarter results will make it possible to better determine the reasons for the increase in tax collection, adding that “the first month may be too early to judge the overall tax situation or the economic situation as a whole.”

Zawaneh does not expect a significant improvement in the economic situation in the short term, particularly since the government's policies regarding COVID-19 are bound to have an important, if indirect, impact on the economy.

Economist Mufleh Aqel said that one of the reasons the amount of taxes collected in January was higher than in the comparison month last year might be the fact that individuals attempting tax evasion were prosecuted, and that statements and audits have been requested.

Aqel said that amount of tax collection in January this year compares to that of other “normal” years, adding that it is not right to rush to judge the results of the tax reform, particularly after only one month, knowing that large companies and organizations that usually pay their taxes early get a 6 percent exemption, which makes the numbers for the first month seem higher than they should be.

Read more Business