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Jordan, February 13, 2020
'New tax incentives by-law for industrial sector positive step'

AMMAN — Approving the by-law on tax incentives for the industrial sector is an important move, Vice President of the Amman Chamber of Industry Ahmed Khudari said on Wednesday.

The by-law grants incentives to stakeholders who achieve a 30-per cent local value addition by employing Jordanians, Jordanian female workers and people with disabilities. The incentives also apply to companies that mange to build links with local industries, the Jordan News Agency, Petra, reported in December 2019.

According to Khudari, the by-law is considered a “positive step” towards increasing the competitiveness of national industries in local and export markets, according to a statement from the Amman Chamber of Industry.

However, it must be followed by support to advance the Jordanian economy, the vice president said, urging that the incentives by-law be applied to all industrial sectors.

Khudari's comments came during a meeting with Director General of the Income and Sales Tax Department (ISTD) Hossam Abu Ali held to acquaint stakeholders with the by-law on tax incentives and the by-law on incentives for industrial activities, which were recently published in the Official Gazette.

Khudari added that enhancing the national industrial sector, which is the largest employer of the national workforce in the private sector, “will reflect positively” on the performance of the national economy and all other sectors, and encourage more Arab and Jordanian investments.

According to Abu Ali, the by-law on tax incentives for the industrial sector is linked to the employment of Jordanians and industrial activity.

He noted that the tax by-law covers 12 industrial sectors, excluding the mining industry.

Eligibility for the incentives depends on certain criteria, the first of which is the percentage of Jordanian workers employed, which is determined by restrictions set by the Social Security Corporation.

The second criterion is related to the employment of women and people with special needs, the required percentage of which is fixed by the Higher Council for the Rights of Persons with Disabilities, he said.

The third criterion is related to the sales volume of small- and medium-sized enterprises in the local market, which must not be less than 10 per cent.

According to Abu Ali, the fourth criterion is related to the Kingdom's less-developed industrial zones.

The fifth criterion is related to factories operating within the Greater Amman Municipality.

He noted that meeting three of the criteria makes an industry stakeholder eligible to take advantage of the by-law to a certain extent.

During the meeting, Abu Ali also announced the intention of the ISTD to open an office at the Jordan Chamber of Industry to serve industrialists and respond to their inquiries.

He clarified that the tax return on the ISTD’s website will be modified to include the new by-laws' stipulations, and that the existing tax return was determined before the new by-laws.

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