Cellcos criticise planned tax increase

14 Sep 2018

Plans to increase levies on Jordan’s already heavily-taxed telecom sector have been met with fierce criticism by the nation’s operators, the Jordan Times reports. The government announced earlier this week that it intends to increase the special tax on telecom services from 24% to 26%, at the same time introducing a new 1% levy on net profits dubbed the ‘solidarity tax’ that will be used to fund scientific research and support for the poor and will collected from all companies – not just telcos. Mobile services in Jordan are currently subject to a fixed 24% tax, as well as the standard 16% General Sales Tax (GST), in addition to which operators also pay the equivalent of 10% of their operating revenues to the government, the paper notes.

Orange Jordan Deputy CEO/CFO Raslan Deiranieh explained that the whilst government might generate an additional JOD2 million-JOD3 million (USD2.8 million-USD4.2 million) across the entire sector from the tax increase – describing the figure as ‘insignificant’ in terms of state revenue – the additional burden would ‘severely hurt the highly challenged telecom sector.’ The case was reiterated by a representative from Umniah, who told the paper that the increase would harm providers’ profitability and ability to invest, adding that the industry could not absorb more taxes. Finally, Zain Jordan added that the measures do not take into considerations the need for ‘stable and fair financial legislation’ for investments, pointing out that taxation and fees on the telecoms sector in Jordan are amongst the highest in the world.