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Lower House resumes deliberations on draft income tax law

By Raed Omari - Dec 04,2014 - Last updated at Dec 04,2014

AMMAN — The Lower House on Wednesday resumed its deliberations over the draft income tax law, maintaining the JD10,000 tax exemption ceiling for individuals’ annual income.

During Wednesday’s session, a majority of MPs approved a provision in the law imposing a 7 per cent income tax on individuals earning above JD10,000 a year, with those making JD20,000 or more paying 14 per cent and 20 per cent respectively. 

As endorsed by MPs, a 35 per cent income tax will be imposed on banks, and a 14 per cent levy on every JD100,000 generated by the industrial sector, which rises to 20 per cent on every JD1 above that amount, the Jordan News Agency, Petra, reported.

The House also endorsed a 24 per cent tax on every JD1 earned by telecommunication, electricity distributing, mining, insurance, reinsurance, finance and rental companies, as well as individuals providing rental and leasing services, Petra said.

Eyad Qudah, director general of the Income and Sales Tax Department, said the provisions on taxable income endorsed by MPs were the same as in the government’s version of the law.

Qudah told The Jordan Times that both deputies and the government agreed to raise the income tax imposed on banks from 30 per cent, as stipulated in the temporary law, to 35 per cent in the 2014 version.

He noted that the new law also raises the tax for a household’s combined annual income of JD48,000 or more from 14 per cent to 20 per cent.

Describing the tax rates stipulated in the law as “fair, generous and normal”, Qudah said “they are really low compared with standard income tax rates in other countries.”

He explained that the tax burden on Jordanian families will be around 0.5 per cent if their net annual income is JD25,000 and 3.3 per cent, 6 per cent and 13 per cent if it is JD35,000, JD45,000 and JD100,000 respectively.

Fewer than 1,000 families in Jordan earn a net annual salary of JD100,0000, according to Qudah.

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