Call to exclude 1,200 hybrid cars from tax increase ‘to be reviewed by PM’

AMMAN — The government on Tuesday said it will study a request by the Jordan Free Zone Investor Commission (JFZIC) to the Prime Ministry calling for excluding 1,200 hybrid cars from a recent decision cancelling  tax exemption on such vehicles.

A specialised economic committee will look into the JFZIC letter which indicated that these cars were imported in the last quarter of 2017, but arrived in Jordan in the first quarter of 2018, thus becoming subject to taxes recently imposed by the government, the commission’s president Nabeel Rumman told The Jordan Times.

“We want the government to exempt these cars that arrived in the first quarter of this year as traders did not know about the government’s decision when they purchased the cars in the last quarter of 2017,” Rumman said, noting that “it takes a while for imported cars to arrive into the country”.

The total value of the 1,200 hybrid cars stands at more than JD20 million, according to the sector leader.

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. 

But on February 1st, the  government started cancelling the exemptions and added another tax on weight of all cars ranging between JD500 to JD1,500. The new tax hikes raised the prices of hybrid cars between JD4,000 and JD8,000, according to the JFZIC.

“The government’s recent decision harmed our businesses and the entire sector and we are calling for exempting these cars from the government’s decision as the traders sent several letters to the government in the last quarter of 2017, asking whether there were plans to remove the exemptions or not in 2018. Since they did not receive any response, they proceeded with the purchase order,” Rumman explained.

“There is already no demand for these cars since the government’s decision and only one car has been cleared since February 1st to date,” he continued, stressing that “traders in the zone cannot tolerate more burdens”. 

Before the government’s decision, some 2,400 to 2,600 hybrid cars were custom cleared each month while the number of custom-cleared hybrid cars is expected not to exceed 4-5 cars by the end of this month, he noted.

Saleem Al Nemer, a sales officer at a car dealership in Amman, said demand of hybrid cars dropped drastically following the decision.

“We had around ten cars that were custom cleared before the decision and we sold only two of them…we still have several cars that are at our offices in the free zone and that have not been custom cleared yet, because there is no demand to complete the clearance and bring them to our showrooms in Amman,” Nemer said.