Jordanian MPs approve the amended law on income tax
The Jordanian House of Representatives passed the law amending the Income Tax Law, which has sparked controversy in the kingdom since last May.
The official Jordanian news agency Petra did not mention the number of MPs voting for the bill or its opponents.
Prime Minister Omar al-Razzaz said his country needs to approve the amended law on income tax, "otherwise we will have to pay more interest on the kingdom's debts."
Al-Razzaz added that "the income tax (according to the draft law) affects a maximum of 12 percent of the highest income earners, and does not include the middle and low income groups, and takes into consideration the principle of escalation."
The House of Representatives approved the exemption ceiling for families in respect of taxable income by 20 thousand dinars (28.2 thousand dollars) for the year 2019, falling to 18 thousand dinars in 2020 (25.38) thousand dollars.
The draft law, the ceiling of exemptions for individuals subject to tax by 10 thousand dinars (14.1 thousand dollars) for the year 2019, and 9 thousand dinars (12.69 thousand dollars) for the year 2020.
The income tax shall be collected from the natural person whose annual net income is less than 300 thousand dinars (423 thousand dollars), and more than the fixed ceiling (10,000 dinars) in ascending order.
The rates will be 5 percent for each dinar in the first five thousand dinars after the exemption ceiling, 10 percent for the second five thousand, 15 percent for the third five thousand, and 20 percent for the fourth five thousand.
The income tax rate will be 25 percent for every dinar, which is more than 300 thousand to one million dinars (423 thousand dollars - 1.41 million dollars), while the net income of more than one million dinars per year, income tax income of 35 percent of income.
Deputies approved income tax on legal persons, 14 percent for industry and 35 percent for banks.
It will be 24% for every KD for telecom companies, distribution and power generation companies, basic material mining companies, insurance companies, reinsurance companies, brokerage firms, financial companies and legal persons engaged in financial leasing activities and 20% for other legal persons.
According to the law, a tax account is created by the Tax Department in the name of "National Contribution Account" for the purpose of paying the public debt, whose revenues consist of taxes determined according to the sector in which the companies operate.
The Council of Representatives retracted its previous decision on article 5 of the amended law, which included the exemption of the total income of the person from the agricultural activity within the Kingdom of the tax, through a return to the original law.
The deputies decided to exempt the amount of one million dinars from the sales of the natural person derived from agricultural activity within the Kingdom, and the first 50 thousand dinars of the net profit of the agricultural activity of the legal person.
Under the amended bill, agricultural activity means the production of crops, cereals, vegetables, fruits, plants, flowers, trees, livestock, fish, birds and bees, including the production of eggs and honey.
The bill sparked controversy in the kingdom after it was approved by the previous government in late May, sparking a wave of popular protests that ousted former Prime Minister Hani al-Mulqi.
Over the course of a few weeks in May and June, the kingdom witnessed widespread popular protests demanding a freeze and amendment of the law, which led to its withdrawal and amendment.
The bill, passed by the government and the Chamber of Deputies (the First Chamber of Parliament), must be passed by the Senate (Second Chamber of Parliament) and then submitted to King Abdullah II to issue a royal decree. 30 days into effect.