ESC reviews investment challenges in free zones

AMMAN — The Economic and Social Council (ESC) on Sunday discussed the challenges facing free zone investors, especially the investment opportunities, declining revenues, and impact of some tax laws on the free zone sector.

Speaking during its meeting, ESC Chairman Mohammad Halaiqa said the council is open to all economic sectors to reach recommendations to be submitted to the prime minister, the Jordan News Agency, Petra, reported.

The drop in free zone investments had a "noticeable" impact on state revenues, and thus other sectors were affected as a result of this plunge, according to Halaiqa.

Halaiqa pointed to the importance of identifying the reasons behind the decline in free zone investment and the related challenges, in light of the COVID-19 pandemic.

As prelude to future action, he stressed the importance of providing figures and data on free zone losses, the tally of investors who quit investments and the impact of this situation on the Jordanian economy.

Chairman of Jordan Free Zones Investment Commission, Mohammad Bustanji, said the income tax law on free zones led to the exit of a large number of investors, noting that , prior to the tax, the number of companies operating in the free zones reached about 4,700, which dropped to about 2,850 companies at the beginning of 2021.

Bustanji said the automobile sector was "greatly" affected by the tax law, indicating that sales went down from 60,000 to 15,000 vehicles annually, adding that about 28,000 workers are employed in the free zones.

The ESC will prepare a policy paper on the subject, and seek opinions from all stakeholders to reach appropriate decisions, according to Petra.