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Tackling tax evasion vital in current economic conditions — experts

By Dana Al Emam - Mar 18,2017 - Last updated at Mar 18,2017

AMMAN — Addressing tax evasion efficiently has become of vital importance to the state budget and the overall economy in light of Jordan’s current economic conditions, experts agreed on Saturday.

Participants in a panel, organised by the Jordan Transparency Society, agreed on the need for stricter inspections and more awareness on the issue, noting that tax evasion decreases state revenues and compels it to resort to external loans with interest rates.

They noted that there are no exact figures on the extent of tax evasion due to the lack of studies that specificly define the size of the “shadow economy”.

Amman Chamber of Industry President Ziad Homsi said tax evasion causes deformities in the market, and prevents fair competition between committed and evading institutions, adding that committed small- and medium-sized enterprises are most negatively affected.

He noted that one-third of local industrial institutions export products and are therefore exempted from taxes. 

However, he pointed the fluctuations in investment regulations, particularly those regarding taxes, as a discouraging environment for businesses.

For his part, Director of the Income and Sales Tax Department Bashar Saber said the total tax loss in 2016 have exceeded JD3 billion. 

The official attributed tax evasion to the lack of awareness on the link between paying taxes and the performance of the state budget, citing legislative impediments, such as the government’s inability to access bank accounts of tax payers, as another challenge.

In addition, he said the penalty for tax evasion, which is between four months and one year imprisonment, is not enough, and yet, is not enforced.

Analyst and columnist at Al Rai Arabic daily Issam Qadamani disagreed with Saber, citing tax payers’ lack of trust in the government as the main driving force behind tax evasion, adding that tax payers do not see reflections of tax-paying on the quality of services.

Meanwhile, he said economic reform could be more achievable if income tax regulations were amended, not sales tax, pointing to a “huge” gap between income tax annual revenues (some JD800 million) and sales tax (some JD3 billion).

He added that decreasing taxes and enhancing public spending on investments was proven internationally to be the best way to boost the economy’s performance, urging the government to reduce taxes to encourage economic activity. 

Lawyer Abdullah Nawayseh attributed tax evasions to the “high and increasing” tax rates, as sales tax have increased over the years from 7 to 10 to 16 per cent and income tax has reached 35 per cent for banks and 25 per cent for other companies. Furthermore, the internal and external double taxation is another impediment.

He noted that tax evaders provide faulty financial records, hide them or intentionally destroy them.

He cited a 2011 World Bank study saying that Jordan’s informal economy, which is not entitled to taxes, fees or registration is between 20-25 per cent of the country’s gross domestic product.

Another study he mentioned claimed that in 2010 tax evasion was between JD525 million to JD575 million.

 

On the sidelines of the panel, Mohammad Hudeib, the new head of the Jordan Transparency Society, honoured its former head Mamdouh Abbadi. 

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We don't want Chicago's ethnic tax dissidentismization attemptations affecting our easy breezy care-free tax way of life. You guys might have to worry all the time about tax sales, but that's because you guys are ethnic. We care about you guys, but we're not going to change and hurry up and pay our taxes in constant fear of our properties getting auctioned off like you guys do. I mean come on. If someone jumps the plank, and everybody else does, who'll make the corned beef and cabbage on parade day?

We don't forgive war mongrels and hedons.

Egypt's new Suez Canal is a shining example of the success and resiliency of our nations to overcome the challenges of economic hurdles during tumultuous economic and social times. Publicly funded, and finished in less than a year. But that doesn't mean that all infrastructure projects should be funded through the public sector. We the people still have our obligations to support and elect a government that accurately represents and protects us as a people. Taxes are an important part of that support. Without taxes, we don't have a government and a structured military to protect us from the threats of war mongrels and hedons.

The tax relief application and monthly payment application must be without explanation sections.

Monthly payments for taxes as an option in addition to the option to choose the tax relief application. If you can not pay it all off in the end, then you have to get the tax relief application form, which has no limits. But you can also fill out the tax relief form at the end of the year prior to upcoming year, or fill it in the beginning of the year of to annul payment obligations for that year. But you can still fill out the tax relief form if you already made payments for the year, and withdraw payments if you are enduring hardships without repayment obligation.

For those enduring hardships.

Tax harvesting and crackdowns only brings in a fraction of potential wealth a country's economy can provide. Plus, it gets everybody figitey about stuff. The best way to tackle market downtime and income loss generation and account hoarding and incubating in the economy is to foster mandatory industry generation, business, and entrepreneur classes in the schools for the children, but also for teens and adults to fix the generation gap loss schedule. Most people want to do things, but are afraid and weary of failures. Failure cushions and mandatory business attainment obligations will cut market slag and keep everybody occupied with something and off the conspiracy wagons while generating wealth, but most importantly, will also alleviate the burden of fear of individual failure outcomes of the individual that plague the Jordanian and Arab nations, the greatest determinant factor in generating swamp economies.

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