Tax law: Before we miss the chance

تم نشره في Sun 21 December / Dec 2014. 10:19 AM

By Jumana Ghunaimat

The Lower House is currently processing the new (draft) income tax law, amid a wave of threats by members to resign and the others asking to withdraw confidence in the government, on the backdrop, however, of the Israeli gas deal.

Government is urgently trying to adopt this strategic legislation, and it seems more interested in implementing the law than it cares for the law to be civilized, so that it contributes to the sought growth and development, which are the key cornerstones of tax laws. It is clearly shown that the idea of money collection is the main motivator on the draft law, without examining the many sensitive issues within the legislation.

Chief of what is missing are the terms related to fighting tax evasion, which goes on year after year without any change in it, even though it helps the government ensure the collection of funds worth hundreds of millions of dinars that evaders must pay to the treasury – instead, it focuses on the collection of bigger amounts from those who are originally committed to paying their taxes; sectors and individuals!

This is what the government is doing without equivocation; we find it again punish those committed to paying taxes to collect an additional 150 million of income tax revenues, while tolerate those negligent and evading taxes, especially medical, engineers, and law professionals among others.

The other issue is related to affecting the development the society has been waiting for, by stimulating specific sectors. But the highlights here, for example, as the very antithesis of the desired goal, the imposition of taxes on the agricultural sector that keeps weak and unable to develop, rather than prospering enough to turn into an exporting sector; a sector that creates value-added jobs and at the same time brings in foreign currency for the country.

Also, the information technology companies, and its dynamic sector weakened by government policies, will find themselves targeted with more taxes, forced to leave for other countries that provide them with many privileges.

With the new law, the government flout the idea of stimulating small and medium-sized companies, which is the main employer of labor, and generates employment opportunities. The law stifles this sector with taxation. It is quite far from being fair or just, let alone devastating for growth and opportunities for reducing unemployment.

What the government and the Lower House are not aware of during the discussion of the terms of the (draft) tax law, is the neglect of the objective and purpose of why we needed a new tax law. Adopting it as it is now will being us missing the opportunity to develop modern tax law that serves the economic vision for the country, and helps alleviate the economic and social burdens.

No one should be surprised if a new government came later and confirmed that the law needs to be changed; it would not be revealing a secret, but stresses what can be easily inferred from a quick reading of the law that exists today in the hands of the Lower House.

The government needs to assume its responsibilities, and reflect on the feasibility of developing such a law that brings us back, and hinders investment, being a turnoff to business owners.

What remains is an opportunity to revisit the provisions of the law based on a vision other than fund collection, believes that the purpose of the tax laws is to expand the circle of beneficiaries and subjects, hoping to make Jordan a model in legislative evolution, not an example on the inability to develop attractive legal environment.

Today, we have two laws economic legislation that take us many steps back; tax and investment law. Are we going to continue as if our goal is the accumulation of harmful laws?



This article is an edited translation from the Arabic edition