This year, Jordan’s Income and Sales Tax Department began implementing the e-invoicing system, marking a significant shift in the country’s tax collection framework. The new system aims to enhance transparency and reduce opportunities for tax evasion by documenting commercial and service transactions in a direct and organized manner and linking them electronically with the tax authority. This measure has long been demanded by experts and advocates of tax reform, who see it as a key tool for achieving fairness and addressing distortions in the existing tax system.
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What makes this system stand out is its ability to close many loopholes that tax evaders previously exploited, particularly in sectors that rely heavily on cash transactions or lack accurate accounting records. Still, it would be unrealistic to assume that e-invoicing will completely eliminate tax evasion. Global experience shows that evaders always find new ways to circumvent regulations. Yet, what matters is that the system reduces the scale of such practices, makes evasion more difficult, and generally raises the level of tax compliance.
As the use of e-invoicing expands, it becomes essential to develop parallel oversight mechanisms, especially in professional sectors where tax evasion is most prevalent. Field observations and feedback that emerge during the system’s practical implementation must also be closely monitored. For instance, one current challenge is the system’s inability to distinguish between individual consulting services provided by natural persons subject to a 5% income tax, and activities carried out within institutions, which fall under the general sales tax. Such technical details require flexible and prompt solutions to avoid unfairness or distortions in application.
Moreover, small and medium-sized enterprises must be given sufficient time to adapt to the technical and administrative requirements of e-invoicing. These businesses cannot be expected to shoulder sudden burdens without adequate technical and training support. Encouraging them to adopt the system also requires practical measures such as simplifying software, providing user-friendly platforms, and possibly offering temporary financial support or exemptions to reduce costs.
However, encouraging e-invoicing alone is not enough to reform the tax system. Broader reform demands a comprehensive review of Jordan’s overall tax structure to make it fairer and more balanced. At present, indirect taxes, such as the general sales tax, customs duties, and flat fees remain high, placing a heavy burden on low-income groups. Conversely, there is considerable room to strengthen progressive income taxation, ensuring that high-income earners and large corporations shoulder a greater share of the tax burden.
E-invoicing is a step in the right direction toward reducing evasion and enhancing tax fairness. Yet, it must be complemented by a comprehensive tax reform agenda that embraces social justice and ensures a more equitable distribution of burdens across different economic groups.
