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‘Black marketers exploiting tax discount on hybrids’

By Omar Obeidat - Feb 26,2014 - Last updated at Feb 26,2014

AMMAN –– There is a thriving “black market” for trading hybrid cars in Jordan, according to Nabil Rumman, president of the Jordan Free Zone Investors Association.

Rumman explained that some traders purchase old cars, which are supposed to be scrapped, and trade them in for fuel efficient cars to benefit from the tax discount. 

In a bid to renew the cars in Jordan and to address the country’s fuel bill, in June 2012, the Cabinet decided to reduce the tax on small-engine hybrids from 55 per cent of the value of the vehicle to 25 per cent and to place a five-year age limit on all vehicles entering the local market.

The decision also granted motorists who trade in cars that are 10-years-old or more, a further tax discount, under which they pay 12.5 per cent in a special tax for hybrids while their old cars are scrapped.

Rumman told The Jordan Times recently that some traders search for cheap old cars that “should not be driven on the Kingdom’s streets” so they can buy hybrids. 

Official figures indicate that hybrid imports increased by nearly six fold last year, totalling 14,565 cars, compared with 2,598 vehicles in 2012. 

“Sales of hybrids went up mainly because of the old cars that were traded in for fuel-efficient ones,” Rumman noted, adding that the number of motorists who purchased green cars subject to the 25 per cent tax was relatively small.

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