Navigating the New Tax Law

By Fahed Khitan

تم نشره في Sun 3 September / Sep 2017. 11:00 PM
  • Fahed Khitan

The offensive against the underway amendments to the tax law began even before the Cabinet finalised their decision.

Just a few unconfirmed leaks were enough to stir the parliamentary atmosphere and raise concern among the Jordanians.

Amendments to the Income Tax Law is perhaps one of the most crucial aspect of legislation affecting countless citizens.

Naturally, any such decision or bill of amendments would stir a heating public debate, over the media, encompassing parties, newspapers, and public forums, all the same.

For a long time, the state has been hoping to steer the public opinion towards domestic issues which affect the people, instead of engaging in political battles, which presumably should not interest citizens.

Now, taxation has become as crucial a topic as any other domestic issue, including education, public health, and transportation, notwithstanding.

Still, it is difficult to hold constructive, healthy debates on almost anything, including these amendments, when the public atmosphere is so charged and hostile. Especially since the amendments have yet to be finalised, not to mention its economic and social assumptions and justifications.

More so, it is unlikely that the government will be able to secure societal and parliamentary consensus over these amendments, if they try to justify them based on the budget crisis. Let alone putting together JOD500 million for next year.

Such provocative suggestions for tax reforms leave no place for objective, healthy debate.

For long this has been our problem in Jordan; we have always tied economic reforms to budgeted needs, instead of to the society’s needs and potential.

Instead of looking for methods to enhance economic performance, as the pillar premise for development, we look to sedate our issues with temporary solutions under international pressure.

The debate on this should begin with the most basic questions, away from the budget bill and its requirements.

First of all, with this taxation amendment bill attain or advance justice? Or is it flawed and unfair?

In the meantime, we should provide the public with all the figures, facts, and information regarding tax revenues, expected and actual, and how they reflect on the budget.

More so, the government should also explain to the public the expected level of enhancements to the quality of services provided to tax payers. This is of course if the revenues really do increase.

There is a common conviction, among Jordanians, that taxation in Jordan is not progressive, and that major corporations and the wealthy lot pay only a fraction of what they owe.

If this indeed is not the case, the public need to know.

The sources of tax revenues need to be disclosed, including the proportion of corporate tax contributions, as opposed to revenues from individuals.

Also, the government must revisit tax evasion, which is an issue our authorities openly admit. Most citizens believe it is the black-hole of our Treasury.

No doubt, moderating an objective debate on the proposed bill will create currents and different positions. But at the same time, it will also result in various practical alternatives which may alleviate some of the effects of the proposed amendments.

Surely, we will never come to a national consensus on the controversial topic of tax law, but by opening up to the public we can make sure it doesn’t turn into yet another national crisis.

Otherwise, it will all turn south under the dome, and MPs will soon start accusations, on top of an agitated, suffocating populace, which only adds to our state’s predicament and amplifies distrust.

This article is an edited translation of the Arabic version, published by AlGhad.