New Income Tax Law aims to target tax evasion

AMMAN — The major objective behind amending the Income Tax Law is not to expand the taxpayer base but to primarily address tax evasion and improve tax compliance, a senior official said.

The official, familiar with the changes under way to the Income Tax Law, cited Prime Minister Hani Mulki's assertion Monday that there "should be a revision of the bill but any amendments will not affect the low-income and middle-income individuals and  households”.

During his meeting with Senate President Faisal Fayez and Lower House Speaker Atef Tarawneh, Mulki noted that amendments to the law aim at improving the efficiency of tax collection and stiffen penalties for tax evasion. 

Mulki stressed his government’s commitment to His Majesty King Abdullah’s directives to protect the middle- and low-income segments of Jordanians.

Describing tax evasion as a “crime against the country and every Jordanian”, the premier said penalty for tax evasion under the new amendments would reach prison sentence that is not replaced by a fine. 

The official, who requested anonymity, said that the new changes will seek to curb tax evasion by some “wealthy” segments, including “doctors, engineering offices [and] mechanics”.

“The new law will oblige such professionals to issue receipts to citizens over which the tax value would be calculated,” the official said.

Participating in a panel, organised earlier this year by the Jordan Transparency Society, Director of the Income and Sales Tax Department Bashar Saber said the total tax loss in 2016 has exceeded JD3 billion. 

The official attributed tax evasion to the lack of awareness on the link between paying taxes and the performance of the state budget, citing legislative impediments, such as the government’s inability to access bank accounts of tax payers, as another challenge.

In addition, he said the penalty for tax evasion, which is between four months and one year of imprisonment, is not enough, and yet, is not enforced.