Start-ups to be exempted from capital tax as of this year

AMMAN — Start-ups will be exempted from capital tax starting this year, Minister of Digital Economy and Entrepreneurship Muthana Gharaibeh announced on Saturday during a World Bank forum on digital economy and infrastructure in the region.

The new exemption for start-ups is an addition to a growing list of government incentives for the ICT-sector, which includes a zero-per cent tax on IT services as well as a zero-per cent income tax on exports, no customs duties on IT-related products and a 5-per cent income tax rate on business done in Jordan.

The government also plans to introduce 40 tech incubators in 2019 to “unleash more of Jordanians’ innovation”, a video displayed during the “Digital Mashreq Forum” revealed.

“We are meeting with important partners in the IT ecosystem business and will hopefully have more big plans to announce soon,” the minister said.

Jordan, according to the video, has moved up 20 places in the Global Tech Competitiveness Index in the last two years, and 24 ranks in the Entrepreneurship Index during the last four years.

Gharaibeh said the Kingdom “intends to keep pushing itself forward, encouraged by the success it has already achieved”.

Opening the forum on Saturday on behalf of HRH Crown Prince Hussein, Prime Minister Omar Razzaz underlined the importance of closing the digital divide, highlighting the government’s commitment to strengthening the digital economy, which is key to creating needed jobs.

At the first-of-its-kind event in the region, the premier said that Jordan’s biggest challenge is empowering the youth and closing the digital divide, stressing that such improvement can only be carried out through digital disruption and improvement.

During a discussion panel at the event, ICT ministers from Jordan, Iraq and Lebanon discussed their countries’ challenges and future plans for development.

Speaking on behalf of Jordan, Gharaibeh said that from 2013 to 2019, Jordan has increased its Internet infrastructure by 60 per cent year over year.

He noted that the sector’s development is “so rapid that just one decision increased digital payments by 37 per cent”, referring to the National Aid Fund’s decision to transfer money to beneficiaries’ bank accounts rather than pay them with cash. 

A total of 22 per cent of graduates also now get their degrees in fields related to ICT, according to the ministry. 

“Entrepreneurship goes hand in hand with IT development,” noted World Bank Economist Rabah Arezki. “This is a chance for an economy where innovation literally pays off.”