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Jordan Enacts New Telephone Call Tax

by Lorys Charalambous, for LawAndTax-News.com, Cyprus

12 January 2009

Jordan’s parliament enacted a new tax on telephone calls on January 6 despite protests from telecommunications companies who claim the tax is unjust. The additional revenue will be used to prop up the country's ailing livestock sector.

Lawmakers were debating whether to re-evaluate the tax after telecommunications companies put forward strong arguments against the tax. The government however declared that it could not reconsider the proposals, as the agriculture fund, which would provide farmers with low interest loans, was vital. Annual revenues from the tax are expected to reach JD13m (USD18.3m).

Telecommunications companies argue that the sector is already heavily taxed, with tax making up 20.5% of a customer's bill. Telecoms firms also pay 25% corporate income tax.

Experts believe that the tax will have an adverse effect on the economy and will deter foreign investors from setting up technology companies in Jordan.

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