Need to amend Revenue Stamps Law

With the financial reform process under way in Jordan, special consideration should be given to amending the Revenue Stamps Law which unjustly obligates public shareholding companies to collect and deliver revenue stamps fees.

The law states that fees on transactions related to contracts, loading bills for imports, sales contracts, mortgage related to transferred money, rent contracts and sub-delays be obtained at a rate of three thousandth (0.003), and collected when organising, recording or providing any of these transactions to any ministry or government department or official public institution, a public institution, Greater Amman Municipality or any municipality, or any joint services board or a public shareholding company.

It also states that a six thousandths fee (0.006) should be obtained on the amounts related to direct purchase transactions, concessions, offers or tenders, and collected when carried out by any ministry or government department or public official institution, a public institution, Greater Amman Municipality or any municipality, or any joint services board or a public shareholding company, and on sales transactions carried out by any of these parties, with the exception of operations relating to sales of public shareholding companies.

The above-mentioned legal requirement equates official public institutions with public shareholding companies in commissioning, without acceptable lawful justification and without differentiating between institutions empowered by the rule of law and private entities established with the shareholders’ own funds.

Moreover, in terms of absolute commissioning, the law equates civil servant and private sector employee without sound legal justification.

As it is, the text creates unfairness because public shareholding companies are obligated to collect the mentioned fees from clients, but not other types of companies that perform the same activity.

This results in higher charges on the service or the items provided to clients by public shareholding companies.

Taking the press, media, advertising and printing industry in various forms as an example, within an overview of the entire sector, only the Jordan Press Foundation (part of which is Al Rai) and the Press and Publishing Company (Ad Dustour) are the two entities that fall under the provisions of this law.

In other words, out of a multitude of institutions and companies working in the same field and offering the same services, the two newspapers are bound by the provisions of the law, just because they are the only public shareholding companies in the sector.

The law adds to the costs of public shareholding companies, when they collect and deliver fees, while other companies that generate more profits than public shareholding companies are exempted.

Unlike official public institutions where the person or agency responsible for payment is clearly specified by the law, identifying a person doing a transaction in accordance with Article 6 is ambiguous, as public shareholding companies sometimes provide services and goods, and sometimes receive them.

Finally, the law does not indicate the party in charge of paying the fee and the party responsible for the collecting and delivering the fees in the case of a deal between two public shareholding companies.

The Revenue Stamps Law needs urgent review to relieve public shareholding companies from the unjust obligation that can also be described as non-constitutional.

In its present form, the law contributes to creating an unfavourable investment climate for public shareholding companies.

If it is necessary to oblige the private sector, it is better to oblige specific activities or certain goods and services (after careful study), regardless of the party performing the activity or the service.

The agency responsible for payment and the agency responsible for collecting and supplying should be clearly identified, leaving no room for misunderstanding.

The writer, legal counsellor at the Jordan Press Foundation, contributed this article to The Jordan Times.