Gov’t, sector leaders ‘reach middle ground’ on imported car fees

AMMAN — The Cabinet on Wednesday decided to lower the tax on hybrid vehicles, weight fee on all vehicles and keep tax exemption on electric vehicles (EV's), the Jordan News Agency, Petra, reported.

These decisions came after various meetings between stakeholders and the government, in which the sector's difficulties were discussed, President of the Jordan Automobile Agents and Automotive Parts Association Tarik Tabba said.

They are acceptable decisions for stakeholders, especially agents, as they are “clear and give agents a sense of stability in the market that enables them to better plan their business”, Tabba told The Jordan Times on Wednesday.

"Although we demanded cancelling the weight tax, and our request was turned down, at least, traders now know what to do in comparison to the previous governments' unpredictable decisions," Tabba said.   

He expressed appreciation for the government's “responsive manner” in addressing the issue that led all to reach a "middle ground".

For Jihad Abunasser, an automobile investor, the time-framed and stable regulations are more important than the tax reduction itself. He also praised  Prime Minister Omar Razzaz for his insistence on reaching a consensus rather than imposing his decisions.

Now, traders know how the situation would be in the coming 3.5 years in terms of regulations, he said, agreeing with colleagues that such an environment facilitates sound business planning.  

"The previous government did not even accept to sit with us or even communicate in any way," Abunasser said, adding that the former government raised and levied taxes suddenly and without any coordination or giving heads-up.

This government, upon the directives of Razzaz, met with stakeholders over two days for four hours on each occasion, “which was against the will of some ‘reversing forces’ inside the government”, according to Abunasser.

Finance Minister Ezzeddine Kanakrieh, Jordan Customs Department (JCD) Director General Maj. Gen. Wadah Hmoud and Income and Sales Tax Department Director General Hussam Abu Ali attended the meetings and discussions.

The decisions stipulate decreasing the clearance tax on hybrid cars from 55 to 30 per cent till the end of this year with a gradual increase by 5 per cent till 2021 reaching 45 per cent.

For scrapping old fuel-run cars and exchanging them for hybrid vehicles, the government reduced the tax to 12.5 for the rest of this year with an increase to 20 per cent in 2019, 25 per cent in 2020 and 30 per cent in 2021 for two-year-old cars. In case the imported car is more than two years old, 5 per cent will be added to the clearance tax. 

The weight tax on cars below 1,000kg has been slashed to JD350 instead of JD500 for cars weighing below one tonne, while it has become JD500 instead of JD750 for cars that weigh between 1,000kg to 1,250kg, and keeping the tax as is for cars between 1,250kg-1,500kg, at JD1,000, according to Petra, and for vehicles above 1,500kg, which will remain JD1,500.