New income tax law ‘too similar to past regulations to attract investors’

AMMAN — Head of the  Lower House’s Economy and Investment Committee Khair Abu Saileik  on Monday called on the government to “support investors and provide them with incentives aimed at the development of the national economy and the enhancement of the investment environment of the Kingdom”. 

The remarks came during a meeting held by the committee in the presence of Deputy Prime Minister and Minister of State Rajai Muasher, Investment Minister Muhannad Shehadeh, Minister of Finance Ezzeddine Kanakrieh, Minister of Industry, Trade and Supply Tareq Hammouri and Political and Parliamentary Affairs Minister Musa Maaytah, where officials discussed the challenges facing the investment environment of the Kingdom and its impact on the national economy. 

The mechanisms to promote the investment climate, the impact of the new income tax law on investments and the need to not place additional burdens on the middle and low-income sectors of the population were some of the issues discussed during the meeting, according to Abu Saileik. 

“Considering what we [economists] have heard from the prime minister in the past days, the new law appears to be too similar to the past regulations and nothing will really change on the ground,” economist Khalid Zubeidi told The Jordan Times, forecasting that “it will for sure not be as positive as people are aiming for, especially in light of the documents signed with the International Monetary Fund [IMF] for an Extended Fund Facility programme”.

For his part, Muasher noted that the new law comes to “redistribute the tax burden and achieve justice among all groups of society, as well as to regulate the procedures of tax administration and address the issue of tax evasion”. 

“The investment climate is one of the most important priorities of the government in light of the difficult financial conditions, and the legislative and economic factors that have greatly affected the nature of investments in the Kingdom,” the deputy prime minister continued, noting that the government is currently working on a study that will “establish a unified mechanism among all government institutions based on the principle of partnership — which will help on overcoming obstacles and providing facilities to investors”.

The role of media and its impact on the investment climate of the Kingdom was another of the issues raised by Abu Saileik, who noted that the committee “supports the free and responsible media and rejects any distortion of the investment environment of Jordan”, stressing the importance of “promoting investment through in-depth, impartial reports”.

Shehadeh lamented the presence of investigative reports that “hold a negative impact on the level of investments while missing accuracy and credibility, depicting an incorrect picture of the investment environment in the Kingdom”.

He stressed the need for “mutual cooperation” between the government and the MPs in order to “develop programmes aimed at encouraging investments on the basis of the local economy”.

 “There is a huge need to reshape the whole investments environment and the government is the first one who can do that,” Zubeidi commented, charging that “all laws passed until now have not been positive for investors, with very high costs for all sectors and bigger consequences for the rest of the economy”.

Several committee members also pointed out to the opening of the Turaibil and the Jaber/Nasib borders, as well as the latest developments in the field of cooperation and trade exchange with the Iraqi side. 

For Hammouri: “Any decision related to the opening of the Nasib border should take into account several dimensions, the most important of which is the security aspect. This obligates us to ensure that the region is safe, rather than focusing solely on the economic and commercial dimensions.” 

On Iraq, he highlighted the “continuous contact” with Iraqi officials to discuss further trade cooperation and boosting of exchanges.