Jordan To Introduce Tax Breaks To Encourage Investment

by Lorys Charalambous, Tax-News.com, Cyprus

17 August 2001

A Jordanian state official announced recently that the government intends to implement a new plan to encourage investment in the Kingdom's less developed governorates.

According to Khalid Tarawneh, head of the Regional Planning Directorate at the Ministry of Planning, the proposed state regulations 'will give investors 100% tax exemption in all projects which will be implemented in the governorates.' At present, investors in the less well developed areas of Jordan receive a tax exemption of between 25% and 75% on their investment.

Mr Tarawneh also hinted that the authorities would provide other incentives for investment, such as the free provision of land and infrastructure for suitable projects. However, he said that the state had no plans to extend the scheme to investors in the urban, developed areas of the country, and project investors in Amman would not receive the new tax exemptions.

The incentive scheme is part of a three year government plan to develop the economic and social potential of the governorates. Other initiatives include training and workshops for residents of the less developed areas in order to qualify them for the job market and thus entice private sector investors.

When questioned by the Jordan Times as to whether there would be any restrictions on the investors who would be able to take advantage of the new tax exemption scheme, Mr Tarawneh admitted that he was not one hundred percent certain at this stage. However, he added that he thought it unlikely that there would be, given that the government tends to offer incentives of this kind to all investors, regardless of nationality. 'The proposed tax exemption aims to create and encourage emigration from the capital and from the highly developed cities to the less well developed and less privileged governorates and not vice-versa,' he explained.

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