Agricultural associations and unions reject proposed new version of income tax law

AMMAN — Agricultural associations, unions and societies unanimously rejected the proposed new version of the income tax law, sector representatives said on Thursday, warning that the sector will take escalatory measures if the law in its proposed version is endorsed.

Sector leaders denounced taxing the agriculture sector under the new version of the law, which indicates that the farmers will have to pay taxes to the government whether they make profits or losses, highlighting that the new draft law did not identify limitations on losses or profits for the agriculture sector.

“This new law, which has also taxed production inputs, is opening the door wide open to importing all of our agricultural products from abroad, especially from the Zionist entity, given the unstable conditions in neighbouring countries,” Jordan Farmers Union (JFU) Director General Mahmoud Oran said.

Earlier this week, the JFU released a statement in which it expressed farmers' “strong objection to the new draft law which will terminate our food security”.

“How do you levy income tax on someone who has no income! How do you tax someone who is threatened of jail for being unable to pay his/her debts! And how do you tax unsold crops!” Oran commented.

Meanwhile, the Agricultural Engineers Association this week issued a statement in which it warned that the proposed amendments to the Income Tax Law will negatively affect the agriculture sector and create new crises on top of what the sector is already suffering, including lack of import portals due to the war in Syria and the instability in Iraq and the taxation of agricultural inputs.

“The society has called for a consultative meeting with leaders of the sector. During the meeting, the sector representatives said that the government continues to take unilateral decisions that affect agriculture in Jordan without discussing the matter with sector representatives,” a member of the syndicate who attended the meeting, told The Jordan Times.

The association is set to hold a press conference soon to talk about the implications of the new decision on the agricultural sector, the source said, indicating that a legal committee has been formed to stop the new amendments that affect the sector.

Last week, the Cabinet approved the mandating reasons for a draft law amending the Income Tax Law for 2018 and referred it to the Legislation and Opinion Bureau.

The government stressed that the draft law aims to realise “social justice and equality” and impose deterrent penalties on perpetrators of tax evasion.

It said that the law, which broadens the taxpayers’ base, is a corrective piece of legislation that would realise tax justice, fight evasion and apply the principle of vertical equity of tax payment.

But research on the draft income tax law, carried out by the Centre for Strategic Studies at the University of Jordan and released earlier this week, said that the proposed new version of the Income Tax Law must be accompanied by reducing the sales tax.

The research detailed several recommendations and alternatives, including that the agriculture sector must remain exempted as is in the current law.