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Agriculture sector representatives praise tax exemptions for production inputs

By Hana Namrouqa - Sep 18,2018 - Last updated at Sep 18,2018

Representatives of the agriculture sector on Tuesday commend the government’s decision to exempt agricultural production inputs from the general sales tax (Petra photo)

AMMAN — Representatives of the agriculture sector on Tuesday applauded the government’s decision to exempt agricultural production inputs from the general sales tax, but said that several measures are still required to resuscitate the ailing sector.

Representatives of the sector said that Monday’s decision is a positive step in the direction of supporting the sector and responding to its complaints, underscoring that in order to allow farmers, and the sector’s different segments in general, get back on their feet further measures are required.

The previous government announced in January of this year, a 10 per cent tax on some agricultural inputs and outputs. The decision drew strong opposition from all segments of the agriculture sector, which managed to pressure the government into annulling the tax on agricultural production outputs, but failed to have the 10 per cent tax on agricultural production inputs cancelled.

Farmers argued at the time that the government’s exemption of outputs means nothing on the ground, because agricultural inputs constitute 82-92 per cent of farmers’ expenditures.

The government’s decision on Monday also exempted taxed production inputs in the poultry sector from 4 per cent which was due before 2018, to zero.

The Cabinet’s decision is meant to support the agricultural sector as it struggles with challenges ensuing from regional turmoil and border closures which led to a significant decline in agricultural exports, and a drop in the prices of fruit, vegetables and poultry, the Jordan News Agency, Petra, reported.

Jordan Farmers Union Director General Mahmoud Oran said that the union, which represents more than 72,000 farmers across the Kingdom, hails the decision, noting that annulling the 10 per cent tax on some agricultural production inputs has been the union’s main demand.

“We hail and welcome every positive decision that the government takes in support of the agriculture sector, but we need several other measures to strengthen the sector and support farmers,” Oran told The Jordan Times.

Oran said that article 5, item A from the current income tax draft law stipulates that farmers earning more than JD25,000 from agricultural activities are subject to paying an income tax, while item B stipulates that a regulation to be issued would define the “agricultural activity and conditions under which item A can be implemented”.

“The draft law fails to provide details on the nature of the regulation which should be issued to define the agricultural activity and conditions under which item A can be implemented.” Oran said.

“Such a regulation cannot be left to the changing state of mind of ministers,” he argued.

The farmers’ representative also underscored the issue of agricultural guest workers, urging the government to reconsider its decision raising tariffs.

“The government needs to take care of several challenges which are affecting the sector, including climate change, marketing of agricultural produce and supporting food industries,” Oran underscored.

The agriculture sector has been in a wreck since the Syrian crisis started in 2011, when the country lost its main portal to the European markets, according to sector representatives, who said that the government in 2016 stopped the recruitment of new guest workers and raised their fees from JD120 to JD500.

Zuhair Jweihan, president of the Jordan Exporters and Producers Society for Fruits and Vegetables, stressed that the society applauds the government’s decision annulling taxes on agricultural production input.

“We of course appreciate the government’s decision, but we also demand that all agricultural produce become exempt from taxes, such as strawberries and eggplants, whose taxes stand at 16 per cent and 4 per cent respectively,” Jweihan told The Jordan Times.

Like Oran, Jweihan criticised article 5 of the income tax draft law, noting that farmers who generate more tan JD25,000 are required to pay taxes.

“Do small-scale farmers, who make up the majority of farmers in Jordan, even keep accounting balances!”Jweihan asked.

He also urged the government to avoid levying taxes on imports, noting that the sector is already strained due to the closure of Jordan’s borders with Syria and Iraq.

During Monday’s session, chaired by Prime Minister Omar Razzaz, the Council of Ministers also decided to reduce the general tax on corn from 10 to 5 per cent.

Abdul Shakour Jamjoum, who is former president of Jordan Poultry Association and spokesperson of the committee for the support of farmers, said that the government’s decision is “most certainly welcomed, but the government should have exempted the poultry sector from all taxes”.

“Corn makes up 70 per cent of poultry fodder, we were expecting complete exemption,” Jamjoum told The Jordan Times.

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