As the world
goes digital, social media platforms have become a popular way for companies to
reach their customers. Such is the case in Jordan, where businesses small and
large use social media platforms like Facebook, Instagram, and Twitter to sell
their products and services. However, with the rise of e-commerce and online
transactions, there is a growing concern about how online sales are taxed.
اضافة اعلان
In Jordan, the
government imposes a value-added tax (VAT) on goods and services sold within
the country. The VAT in Jordan is currently set at 16 percent and is applied to
most products. However, when it comes to purchases made through social media
platforms, there are some challenges in enforcing this tax.
Obstacles to
social media taxationOne of the main
challenges is that many businesses selling through social media platforms may
not be registered with the tax authorities in Jordan. This means that they may
not be collecting or remitting VAT on their sales. To address this issue, the
government could require all businesses selling through social media platforms
to register with the tax authorities, and thereby collect VAT on their sales.
Another
challenge is that it can be difficult for tax authorities to track sales made
through social media platforms. Unlike traditional brick-and-mortar stores or
online marketplaces like Amazon or eBay, social media platforms do not have a
centralized system for tracking transactions. To overcome this challenge, the
government could require businesses selling through social media platforms to
provide regular reports of their sales activity to the tax authorities.
One of the main challenges is that many businesses selling through social media platforms may not be registered with the tax authorities in Jordan.
Difficulties are
also faced in educating both businesses and consumers about their tax
obligations when conducting purchases through social media platforms. Many
small businesses may not be aware of their tax obligations when selling through
these channels, while consumers may not realize that they are required to pay
VAT on their purchases. To address this issue, the government could launch an
awareness campaign aimed at educating both businesses and consumers about their
tax obligations when using social media platforms for commerce.
A guide to
taxing social media transactionsHere are some
practical steps that relevant bodies can take to install a functioning social
media taxation system. Firstly, the Kingdom’s taxation authorities should
develop clear guidelines and regulations for taxing social platform
transactions. These guidelines should be easy to understand and implement for
both taxpayers and tax collectors and should cover all types of social platform
transactions, including advertising revenue, e-commerce sales, and influencer
marketing.
The Kingdom’s taxation authorities should develop clear guidelines and regulations for taxing social platform transactions. These guidelines should be easy to understand and implement for both taxpayers and tax collectors
Secondly, the
taxation authorities should collaborate with social media platforms to collect
data on platform-based transactions. This data can be used to identify
taxpayers who are earning income from social media platforms and ensure that
they pay their taxes.
Special rates
and monitoringThirdly, the
taxation authorities should consider introducing a special tax rate for income
earned from social media platforms. This will encourage taxpayers to comply
with their tax obligations while also ensuring that they are not overburdened
with high tax rates.
Fourthly, the
taxation authorities should invest in technology to improve their ability to
track and monitor social platform transactions. This will help them identify
taxpayers who are not complying with their obligations and take appropriate
action against them.
In conclusion,
while there are certainly challenges involved in imposing taxes on purchases
made through social media platforms in Jordan, it is important for the
government to take steps to ensure that all transactions are properly taxed. By
requiring businesses to register with the tax authorities and provide regular
reports of their sales activity, and by launching an awareness campaign aimed
at educating both businesses and consumers about their tax obligations when
using these channels for commerce, the Kingdom can ensure that it collects all
necessary taxes on social media transactions.
Hamza Alakaleek
has graduate degrees in International Political Economy and International
Business Law from Yarmouk University and University de Montreal with focus in
internet of things, artificial intelligence, and data protection.
Read more Opinion and Analysis
Jordan News
.jpg)
.jpg)
