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New income tax test

Jun 05,2018 - Last updated at Jun 05,2018

It is a very analytically interesting situation for all parties concerned in this deadlock over the proposed Income Tax Law. No one is actually immune from the perplexing dilemma of not knowing exactly what option to take.

Hani Mulki’s government believes that it has done a very good job in finding a balanced path to follow regarding amendments to the Income Tax Law. Cabinet ministers argue that the amendments put the burden of proof on the Income and Sales Tax Department (ISTD), which increased taxes on the rich, tapped resources that should not be exempted and intensified penalties on tax evaders.

The opposition believes the law is utterly useless. It taxes the income of the middle class and the poor, leaves too much authority and polytonal judgement to the director of the ISTD, dictates jail sentences for minor oversights and does not include articles to improve tax collectability.

The response of the government to the demands of opposition that the law should be withdrawn is rejection. The government has done all it could to produce a good law. The rest of the burden should fall on the Parliament. The opposition can make its points through that legislative process. Moreover, the government considers the new proposed legislation as a partial fulfillment of its commitment to the International Monetary Fund-brokered fiscal reform package.

The opposition, especially union leaders, believes that the Parliament will approve the law, and thus, they do not want it discussed at all. The governments’ new version of the Income Tax Law does not constitute an acceptable reference to start with. The opposition hoped that the Parliament would take its side and impress on the government to ask for the return of the law’s text for further deliberations.

The Parliament cannot force the government to do so while it is on legislative holiday. Therefore, MPs hoped that the unions would agree to the proposal that they would vote against the law once they are called back to an extraordinary session.

Assuming that the outcome of the prospective extraordinary session is to reject the law, then why would the government propose to His Majesty King Abdullah to decree such a session in the first place?

All of this political haggling is taking place while two important issues are looming unresolved. First, what about the near unanimity of the Jordanian people, who have resorted to protests demanding the killing of the income tax draft law and the eviction of the government from the fourth circle?

Here comes a new dilemma: can authorities accommodate such protests? What if they do, and what if they do not? Both options are equally problematic.

The second issue is the frequency of holding extraordinary parliamentary session during legislative holidays. Is the debate over the proposed law deserves all that urgency? I think it should take all the time it needs for approval because hesitance has made us introduce for new tax laws, including the current one, since 2009.

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