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MPs want tax exemption on hybrid cars reinstated

Lawmakers cite ‘profound’ impact on sector

By Raed Omari - Mar 11,2018 - Last updated at Mar 11,2018

Hybrid cars pay a reduced special sales tax of 25 per cent of its price, instead of 55 per cent for regular fuel cars (File photo)

AMMAN — A group of MPs on Sunday called on the government to reinstate the tax exemption on hybrid cars, citing the "tremendous damage" to the sector as a result of the recent tax hike on such vehicles.

In a memorandum they submitted to the Lower House's permanent office to be forwarded to the government, 33 lawmakers said that the government's decision to cancel tax exemption on hybrid vehicles has deprived the Treasury of millions of dinars generated from the customs clearance on such eco-friendly cars. 

In their memo, a copy of which was made available to The Jordan Times, signatories said that the government's decision to increase customs fees on hybrid cars from 12.5 per cent to 55 per cent has led to a "zero trading" activity in the free zones.  

Hybrid car buyers used to pay a reduced special sales tax of 25 per cent of the price instead of 55 per cent for regular fuel cars.

The government decided to cancel the exemptions in 2012, but the decision has been always postponed since then. This year, the government cancelled the exemptions and added another tax on weight of all cars ranging between JD500 to JD1,500.

"Revenues generated from customs clearance of hybrid cars reached JD400 in 2017 but 'zero revenues' have been registered at the free zones during the first quarter of 2018," MPs said.

Signatories said that the decision to cancel tax exemption on hybrid cars is "not only destroying the sector but is also destroying the economic and social security".

The new tax hikes, which took effect February 1, raised the prices of hybrid cars between JD4,000 and JD8,000, the Jordan Free Zone Investor Commission  President Nabeel Rumman told The Jordan Times previously.

Rumman called on the government to extend the tax exemption, as it would have positive impact on the national economy with direct revenues to the Treasury.

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