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Tax Reform in Jordan
Need of a comprehensive and reasonable national dialogue - Need to restore public trust

The protests on the streets have ended (at least for the time being), the planned tax increases are withdrawn, the cabinet is rebuild and the economic recovery is declared (once again) as the priority of the new government.

Participants in Madaba

Participants in Madaba

UniHRD

Jordan had witnessed widespread demonstrations, strikes and protests by people, trade associations, labour unions, merchants, wholesalers and even supermarkets, big and small. There is a slowing economy in the country, a rise in unemployment, on the other hand an excessive bureaucracy with high hurdles for start-ups. The lack of sustainable investment and real structural reforms do not strengthen a economy that will create jobs. Reduced aid (for example, from the US and Saudi Arabia) and demands from the International Monetary Fund (IMF) for structural reforms, and especially for an increase in tax revenues, have increased pressure on the previous government to cut subsidies (for example for bread) which has led to strong price increases. The then presented tax package, which included an increase in sales tax and income tax was the trigger for the demonstrations that drove thousands onto the streets. Higher prices and stagnating or falling incomes are no longer acceptable to the majority of the population.

The previous government has also failed to reach a clear stance within a national dialogue including all civil society representatives about the difficult situation and the measures needed to be taken. The new Prime Minister Omar Razzaz has stated in this regard that tools for communication with the people are indispensable so as to take their ideas and suggestions into consideration.

UniHRD

According to the above mentioned the Arab World Center for Democratic Development - UniHRD and the Hanns-Seidel-Stiftung implemented two workshops (14th of July 2018 in Irbid and 21st of July 2018 in Madaba) titled "The Income Tax Law -  Comparison between the proposed amendments and the current law" in order

  • to provide an overview of the tax system in Jordan and to offer a glimpse of its evolution and the tax burden on the population
  • to shed light on the most recent amendments made to the income tax law in Jordan
  • to ensure that the tax system and the income tax law and it target is clear for the youth
Heated discussions

Heated discussions

UniHRD

Topics discussed among others:

  • Tax structure in Jordan - a historical brief
  • Impact of tax policy on public revenues
  • Effect in investment and public services
  • Income tax amendments
  • Combating tax evasion

The participants in the workshops in Irbid and Madaba were youth from the south, north and med of Jordan, working in different institutions in private and governmental sectors, from Universities as well as representatives from the Ministry of Labour, the Ministry of Finance, the Income Tax and Sales Department and various NGOs.