Jordan mobile imports suffer substantial drop after tax hike
Mobile exports for this year are expected to drop by 60-65 per cent as a result of the decision, which, they said, will force them to lay off employees and consider closing mobile companies’ regional offices in Jordan.
The government’s recent decision to increase the special tax on mobile phones from 8 per cent to 16 per cent will make Jordan no more a hub for exporting mobiles to neighbouring countries, they warned.
“The government thinks this decision will increase the revenues it makes. On the contrary, this decision will dramatically reduce its revenues from companies such as ours as sales will decline and smuggling will spread,” said Fadi Baransi, vice president of BCI, the official Samsung Mobile Phones distributor in Jordan.
Also speaking at a press conference on Sunday, Qusai Gharaibeh, CEO of New Vision, the distributor of LG Electronics’ household appliances, home entertainment devices, ACs and mobile phones in Jordan, echoed similar remarks.
About 50 per cent of Jordan’s imports of mobile phones are usually exported to neighbouring countries, mainly Iraq, Lebanon, Syria and Palestine, Gharaibeh said.
“After the tax increase, the Jordanian market is not as lucrative as before. Traders from neighbouring countries will now head to other markets to buy mobiles, where the devices are cheaper than in Jordan,” he warned.
Mahmoud Tahboub, general manager of the Tab Communications & Technologies Company, the exclusive HTC distributor, said prices of mobile phones in Jordan will be about 10-15 per cent higher than other markets in the region, which will make it impossible for Jordanian traders to export mobiles to other countries.
Tahboub said Jordan is no longer a country where it is feasible for mobile manufacturers to open regional offices to reach regional markets. Global mobile companies are already thinking of relocating their regional offices from Jordan to Dubai, he claimed.
Al Waseet Mobile Company, the exclusive Sony distributor, agreed.
“We call for an immediate freeze of the irrational decision. It was taken without any consultations or a thorough study. It is negatively affecting citizens, distributors and the government itself,” Iyad Al Thaher, the company’s general manager, said.