Raising licensing fees for large-engine cars bad for market — free zone investors

AMMAN — The government's purpose in its latest decision to increase licensing fees for newly imported vehicles will likely backfire, the Jordan Free Zone Investors Association (JFZIA) said on Monday.

Under the new decision, licensing fees for vehicles with 3,001-4,000cc engines will be JD440, while the fees for engines larger than 4,000cc will be JD650.

The decision applies to newly imported vehicles as of Monday.

"The government already used to take no less than JD15,000 in custom duties for cars with 3,000cc to 4,000cc engines. Now the new decision will reduce demand on big engines and that means incurring heavy losses," JFZIA President Nabil Rumman told The Jordan Times on Monday.

He said the government already used to receive a "huge chunk of money" from the licensing fees of big-engine cars, and the new increase will have a "major" impact on demand for such cars.

"We are talking about a recession in the big car market that will benefit no party," the JFZIA president added.

On the other hand, Rumman noted that big-engine cars are "not always a luxury, for they are needed in a mountainous country like Jordan".

The government on Sunday reached a deal with MPs over its decision to raise car licensing fees under pressure from the Lower House, the media and the street.

Following a closed-door meeting with the House's Permanent Bureau ahead of a session to discuss the 2016 general budget bill, the government  revisited its recent increase of car licensing fees, leaving the cost of licences for vehicles whose engines are sized 3,000cc and below unchanged.