As the countdown for implementation of the second phase of the General Sales Tax (GST) in Jordan has started, officials strongly urged taxable persons to register themselves in order to avoid penalties and benefit from the refundable tax system. Under the second stage of the GST, which will be in force as of January 1, a general sales tax shall be imposed on the import or supply of goods and/or services unless such supply is exempted under this law.
There will also be a special sales tax on the import of certain commodities including cars and cigarettes. While the general sales tax will be levied at 13 percent of value of import or supply of goods and services, the special tax shall be set under a bylaw.
"We call on every importer who is not registered in our importers' list to add his/her name to the registrants' network before the end of January 2000," said Iyad Qudah, director general of the GST Department. The law defines a taxable person as anyone who imports or supplies taxable goods or services or both while he is registered or required to be registered with the department.
Unless the import is for private purposes, the law states that a taxable person shall be liable to apply for registration within 30 days of the receipt of his/her first taxable consignment. In addition, the law stipulates that the taxable minimum turnover for merchants is 250,000 Jordanian dinars and JD 60,000 for industrialists. There will be no minimum for importers.
Qudah also urged registered importers, manufacturers and merchants who wish to terminate their registration to do so before January 2. That the registrants make certain their addresses and tax declarations are 100 per cent correct is yet another advice that would preclude violations, he said.
"Registrants must check their invoices and addresses [to be sure that they] are accurate, because the department will deal with them via the post, through which awareness brochures and their tax forms will be sent," Qudah said. "They will also be paying their dues to our account at the Jordan Kuwait Bank," added Qudah in an interview.
A fine ranging between JD100-500 will be imposed for any delay not exceeding 60 days from the end of the prescribed date for registration. A harsher fine — between JD200-1,000 — will be levied on any delay in submitting the application form for registration for a period exceeding 60 days from the end of the date prescribed for registration, and in case of recurrence, the fine would be doubled.
"Besides avoiding such penalties, taxable people will benefit if they register," Qudah told the Jordan Times in an interview. As an example, Qudah said, if the total cost of goods is JD 1,000, with the 13 percent added, the merchant would pay JD130 in sales tax, for a total of JD 1,130. The department will reimburse the JD130 to the merchant, and thereafter impose a 13 percent sales tax on the selling price of the goods.
Last May, the Sales Tax Law was amended to bring more items under its purview, while exempting some items that were earlier taxed with effect from the New Year. The amendment also unified the sales tax on both local and imported commodities.
In June 1999, Parliament approved a controversial amendment, increasing the sales tax from 10 to 13 percent. The amendment was one of 11 bills that were passed, so as to pave the way for Jordan's accession to the WTO and to facilitate the execution of the IMF-backed economic reform program.
Government officials expect more than JD40 million in additional windfall revenues for the treasury when the second phase of the (GST) Law comes into effect. — ( Jordan Times )
By Rana Awwad
© 2000 Mena Report (www.menareport.com )