08/02/2022

The Director General of the Income and Sales Tax Department, Dr. Hossam Abu Ali, stressed that the failure to impose or increase taxes in recent years indicates the effectiveness of the tax reforms that have been made to the tax system in the Kingdom

The Director General, Dr. Hossam Abu Ali,  said during a dialogue session with the Jordanian Economic Forum, that the Kingdom has been carrying out tax reforms for more than three years, based on a basic rule that emphasizes "not imposing new taxes or tax increases, and in accordance with the royal directives and vision

The Director General, Dr. Hossam Abu Ali,  pointed out that the gaps and distortions that existed in the tax system, imposed the finding of tools that enable the department to address the tax system from its various aspects, which came within Law 38 of 2018, with the aim of combating tax evasion and closing the gaps on tax avoidance.

Tax evasion is defined as a violation of a law, whether through falsification of invoices or financial statements, concealment of data, or submission of incorrect data with the intention of not paying or reducing the tax.

As for tax avoidance, the law is not violated, but a loophole in the law is exploited through which the taxpayer can reduce the tax due.

Abu Ali explained that the basic rule of tax reform was to enable the Income and Sales Tax Department to play its role in combating tax evasion and to issue all the tools that close the existing loopholes, as well as providing the tools of human cadres and the necessary systems for that.

During the session, Abu Ali presented the most prominent achievements in the tax reform file by amending the principles, and making the department a data bank for all economic activities, which made the burden of proof on the auditor and the taxpayer honest in what he submitted in the return unless proven otherwise, which enhanced confidence between the two parties.

He pointed out that the department expedited the completion of tax returns in order to shorten the time and clear the blame, with stricter penalties for those who are proven to be tax evaders through the tax court or the tax public prosecution, which has become part of the judicial system

He pointed out that the department expedited the completion of tax returns in order to shorten the time and clear the blame, with stricter penalties for those who are proven to be tax evaders through the tax court or the tax public prosecution, which has become part of the judicial system.

He pointed out, during the session, which came within the program of the economic salon that the forum holds periodically, to what has been reformed in the mechanisms of combating tax evasion, as it was previously based on information provided, while today it is carried out according to risk management, and specialized computerization for all sectors through which companies’ data are audited that are identified.

He pointed out that the department has also taken reform measures related to the case of disagreement between the auditor and the taxpayer, as this is transferred to the Directorate of Cases and Objections, which includes high expertise and competencies and has wide powers to resolve controversial issues, if any, in addition to the formation of sectoral committees for auditing and not individuals.

Abu Ali confirmed during the session, which was moderated by a member of the Forum’s General Authority, Dr. Adel Al-Qatawneh, that the department replaced the security escort during inspections and audits by using the camera to record any operations, explaining that this procedure brought peace to the minds of the taxpayers, and the discipline of the employees.

He pointed out that the department worked to form settlement committees with regard to the old claims, including judges and representatives of the private sector and tax, without paying any fees, stressing that the majority of the decisions issued by them were accepted by both parties.

And he indicated that the department established a special institute for employees for the purpose of raising competencies, building their functional capabilities and qualifying them at a high level to keep pace with all developments that occur on tax legislation, which contributed to the development of the auditors' performance and career path

Abu Ali stressed that these measures have worked to stop any tax increases on goods and services in recent years and have improved tax collection processes, while not raising rates despite their coincidence with the Corona virus pandemic

Abu Ali explained that the results of the reforms and the fight against tax evasion that took place despite the fact that many economic sectors stopped working during the pandemic, strengthened and increased the value of taxes that were paid from closed sectors

He pointed out that the department's total collections during the past year amounted to 5,213 billion dinars, including 1,176 billion as income tax and 4.36 billion as sales tax, which covered what was estimated in the general budget and the re-evaluation that took place in the 2022 budget

He pointed out that the department's collections of income and sales taxes last January amounted to 528 million dinars, compared to 476 dinars during the same month of last year 2021

Abu Ali indicated that the most important in the collections of last January of this year is that the income tax amounted to 36 percent of the collections, which indicates the results of addressing the structural imbalance between direct and indirect taxes, and the stability of exemptions granted to individuals and families

With regard to the national billing program, Abu Ali indicated that the Ministry of Digital Economy and Entrepreneurship has been assigned to complete it, expecting that the tender will be launched at the latest during the month of next March, and the tender will include both the "National Billing Program" and the "Tax Accounting Program".

He explained that the department had completed a draft law amending the general sales tax law for the year 2021, which is currently in the possession of the parliament, according to which the period for requesting refunds was reduced from 6 months to two months  .

He stressed that the majority of the professional sectors are committed to paying the tax due on them, and the department is proud of everyone, and a special directorate has been established for them in the department responsible for all their files.

He pointed out that there is a project that will be implemented during the current year related to tax awareness and culture so that citizens and taxpayers are informed about the aspects of spending the collected funds and improving and developing the services provided.

Abu Ali stressed that the inspections and tax audits that took place during the past year were not carried out with security escorts, as this was replaced by cameras, indicating that the number of tax returns, whether income or sales, that were submitted electronically during the month of last January amounted to 56,200 return.

In turn, the Chairman of the Board of Directors of the Forum, Deputy Khair Abu Sa'ilek, who spoke through the "Zoom" application, praised the level and efficiency of the tax administration during the recent period, as it has made great strides in tax reform, and it still has a lot to accomplish in this regard.

Abu Sa'ilik stressed the need to strengthen the tax culture, and that there should be a media and awareness role for the government to instill tax culture and consider it a part of citizenship and a duty towards the homeland, since the money collected is spent on services.

He stressed the need to educate the tax auditor and raise his level, especially that the burden of proof falls on him, pointing out that there are complaints about practices issued by some auditors that violate the law.

Abu Sa'ilik stressed the need to intensify the use of electronic means when auditing and inspecting on taxpayers, in a manner that reflects the civilized image of Jordan, as well as the need to balance direct and indirect taxes and reconsider the sales tax.

For his part, a member of the Board of Directors of the Forum, Al-Ain Issa Haider Murad, indicated that the Income and Sales Tax Department has adopted, in recent years, civilized methods when dealing with taxpayers and dealt with everyone transparently.

Murad indicated that the message of the forum, which was established several years ago and includes influential economic references and experiences, focuses on contributing to increasing the competitiveness of the national economy, achieving sustainable development goals, positive interaction and integration with partners.

During the session, members of the Jordanian Economic Forum presented many opinions and ideas related to the importance of reforming the tax administration in Jordan and addressing distortions and what is reflected in the growth of the national economy.

They stressed the need to enhance tax awareness and culture, raise the efficiency of employees, especially auditors, and expand the segment of taxpayers, as well as informing citizens with full transparency of the aspects of disbursing collections.

They pointed to the importance of expediting the completion of the invoicing  system, addressing the tax burden and effort, stopping security escorts, expanding reconciliations and settlements, not punishing those who are committed, expediting the payment of private sector refunds, canceling the registration threshold, and controlling some professions to reduce tax evasion.

They stressed the importance of spreading tax culture, and establishing a situation in which a government employee feels that he is providing a service to the citizen as he is a taxpayer, stressing the need for tax collections to be reflected in the form of services whose impact is felt by everyone.