House endorses income tax bill, expands exemptions

AMMAN — The Lower House on Tuesday passed the draft income tax law following 14 meetings over two parliamentary sessions dedicated to debating the key economic law. 

Lawmakers completed their deliberations over the 2014 amendments to the Income Tax Law on Sunday but did not vote on the law as a whole until Tuesday upon the request of several MPs who requested revisiting some of the provisions previously approved. 

Under the new law, a 7 per cent income tax is imposed on individuals earning up to JD10,000 a year after the exemptions are calculated, while those making up to JD20,000 should pay 14 per cent. Above that threshold, the tax on individuals is set at 20 per cent. 

The first JD24,000 of the family income is exempted from tax, plus JD4,000 that should be supported with bills. 

For unmarried persons, the exemption applies to JD12,000 plus JD2,000 supported by bills.

As endorsed by MPs, a 35 per cent income tax will be imposed on banks, and a 14 per cent levied on the first JD100,000 generated by the industrial sector, rising to 20 per cent on each JD1 above that amount.

As proposed by the House's Economic and Investment Committee and approved by a majority of MPs, importers have to pay a 2 per cent tax on the total value of their imports, to be collected by the Customs Department and then transferred to the Income Tax Department.

Any person with one income or more is required to submit a tax declaration issued by the Income Tax Department before the end of the fourth month of the tax accounting period, under the deputies’ amendments, which also oblige every heir and general legatee to submit an inheritance tax statement to the respective office where the deceased person was last registered for tax purposes within 90 days from the date of death. 

If taxpayers, be they individuals or companies, fail to submit their tax statements during the period stipulated in the law, the Income Tax Department will determine the value of the income tax and the fines, and will inform the taxpayer in a written document of the result of its initial tax assessment, according to another provision endorsed by MPs.

Under deputies’ amendments, a 0.004 per cent of the tax value will be imposed on taxpayers for each week of delay in paying due taxes.