IMF says tax law ‘still under review’

AMMAN — The International Monetary Fund (IMF) on Thursday said it was still reviewing the final details of the recently endorsed Income Tax Law.

“We will continue to discuss with the Jordanian government their plans going forward, and we will jointly agree on the next steps,” IMF spokeswoman Wafa Amr said in remark to The Jordan Times on Thursday.

Earlier this year, government officials held meetings with IMF representatives in Amman and in the US to examine progress made under the 36-month Extended Fund Facility (EFF) programme and decide on how to proceed with the reform scheme.

Jordan and the IMF signed the $700-million programme in 2016 under which the two sides agreed on six conditions that aim at reducing public debt to safe levels and stimulating the economy. Under the deal, Jordan is expected to generate around JD520 million in additional revenues this year alone.

The controversial Income Tax Law, which will go into effect in 2019, is part of fiscal reforms under the programme and its endorsement was a necessary step for conducting the second review of the economy under the EFF programme.

Under the new law, the threshold for taxable income is set at an annual JD20,000 for families, with JD2,000 exemptions on VAT medical and education receipts and loans, and at JD10,000 for individuals.

The previous law set the figure at JD24,000 for households, with JD4,000 in exemptions on VAT medical and educational receipts and invoices, and at JD12,000 for individuals.

In August 2015, Jordan completed a three-year stand-by arrangement with the IMF, involving a nearly $2-billion loan.