IMF delegates meet with independent pundits over tax system

AMMAN — A delegation from the International Monetary Fund (IMF) on Tuesday visited the Experts Society of Income and Sales Tax to discuss tax disputes and how best to develop the institutional capacity of the Income and Sales Tax Department (ISTD), the Jordan News Agency, Petra, reported.

President of the Society Hashim Hamza provided a summary of mission the society, which groups people who have competence and efficiency in the field of tax consultations, deep knowledge and experience in tax laws and ISTD-related regulations.

Hamza also explained the role of the society in cooperating with the relevant official authorities and assisting them to draft laws, regulations and instructions to improve the tax system in general and regulate the profession of tax consultations in particular in order to preserve the rights of all parties.

For his part, Keith Carter, the head of the delegation and the IMF representative, asked on the possible means to address these conflicts and develop the capacity of taxation agencies. 

He also asked about the causes that have led to the tax disputes, the solutions needed to solve them, and suggestions for improving the performance of the ISTD.

The president of the society said that the controversies between ISTD and taxpayers are rooted in  “ignorance” of the latter in the law, the poor training of some employees of the department, the existence of ambiguity in some articles of the law that could be interpreted differently and the lack of trust between the two sides

Hamza underlined the need to provide technical and financial support to the ISTD, increase incentives for employees, improve the work environment, provide effective training courses and delegate broader powers to the tax administration to settle disputes, among others.

Hamza stressed the importance of giving taxpayers sufficient time to submit their payments data and documents to reduce the frequency of cases referred to the tax court.

Hamza added that it is necessary to have a specialised body, whose decisions are binding for both the ISTD and taxpayers, to have the final say in the interpretation of ambiguous and controversial legal provisions.

A tax law drafted by the government of Hani Mulki, which expanded the taxpayer base and toughened tax evasion penalties, triggered public anger earlier this year and led youth in Amman and other cities to demonstrate in rejection of the law.

The government, as a consequence resigned and its successor, led by Prime Minister Omar Razzaz is working on a new version of the law. 

Tax reform is a requirement by the IMF to facilitate a $723 million Extended Fund Facility  reached with the lender in 2016.