Restaurant association worried new tax law would affect customer base

AMMAN — The Jordan Restaurant Association (JRA) has warned the government that the new income tax law will affect their already-disadvantaged sector indirectly, which would further contribute to the deterioration of their sales.

With a recent study showing that touristic restaurants’ sales have gone down by 35 per cent this summer, the JRA asked the government to consider the challenges of the sector.

Although the new income tax law does not directly impose taxes on these restaurants, the JRA claims that it will “indefinitely affect the middle class”, therefore making dining out the least of their priorities due to their shrinking budgets.

The middle class, which the JRA considers its “customer base”, constitutes a huge gap and loss if they were to stop dining out, according to touristic restaurant owners. The main reason behind the gap is that the local middle class are all-year-round customers, unlike tourists who only visit once or twice a year.

“We have a large number of customers who like to dine at our restaurant two to three times a month as a change from their daily routines. If these customers who have been coming in for years stop doing so, that means we have no stable income,” Abu Ahmad Freihat, owner of a touristic restaurant in Jerash, told The Jordan Times.

His chef, who has been working at the restaurant for twenty-two years, added that tourists are what they call “seasonal income”, given that they only come around during the summer or winter breaks and might not come back to the same restaurant as they “would rather try out new places”.

However, owners have pointed out that there has been a problem in this sector long before the income tax law. 

“Our sales have been down for years, because of the heavy taxation we are under. Rents, work permits and food products have all gone through the roof lately as well,” Rafat Taani, owner of a restaurant in Irbid, told The Jordan Times.

“Many of my friends who have been in the business for years have sold their restaurants or shut them down. It’s no longer a lucrative business when more than half your income is distributed between taxes, worker salaries and other operating expenses,” manager of a Syrian cuisine restaurant, Rawhi Bondokji, told The Jordan Times,.

Some citizens shared the same views as the JRA regarding their budgets preventing them from dining out. 

“We used to go out every Friday to a restaurant in Jerash, but the last few years the bill would come back ridiculously high, which is something we can’t afford as a family of six with only two limited incomes,” said Rana Hroub, mother of four.

“It’s not only about the bill, but also about the quality of food. I don’t know if this is powered by the owner’s greed or by the quality of food products, but I got food poisoning twice from a fancy restaurant that I used to love,” Christine Taja, a university student, told The Jordan Times. She added “later on, my cousin worked at that restaurant and told me the owner buys meat whose kilogramme is no more than JD2, and then advertises it as top-quality meat”.