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Recent Trends in Jordan: Law & Economy

By : AL Armouti  |   
9/2/2020   |   
631   |   

Jordan is continuing to experience an economic downturn due to the unstable political situation in the Middle East especially in neighboring Iraq and Syria where Jordanian exports are facing profound market entry barriers.

 

To boost the economy, the Jordanian government has recently introduced stimulus "bundles” which provide reductions of duties on real estate sale-related transactions, sales tax reductions on multiple consumer commodities, and reductions of duties on the sale of vehicles.

 

The government also introduced two regulations (programs) to subsidise the domestic industry; the Industrial Activities Stimulations Regulation, and the Regulation on Income Tax Stimulations for the Industrial Sector. Under the Industrial Activities Stimulations Regulation, domestic industries will be entitled to receive direct financial payments from the government amounting 3% of the value of their exported goods each year, and an additional 5% of the value of exported goods if the volume of such exports exceeded exported quantities in the previous year.

 

As for the Income Tax Simulation Regulation, the domestic industry will enjoy a reduction in income tax by approximately 2% of applied rates if the concerned industry increases local employment by at least %1 each year.

 

After the cancelation of the Jordan –Turkey Free Trade Agreement in November 2018, Jordan has recently signed an economic “framework” agreement with Turkey for a joint economic committee with the objective of bolstering ties, increasing bilateral trade and boosting economic relations.

 

The Jordanian government has recently applied quantitative restrictions on Aluminium imports (monthly cap of 175 tons from all countries).

 

Jordan is currently investigating a safeguards petition filed by the Jordanian Potato Chips industry against like imports, on the basis that the increase in the import of Potato Chips had caused serious injury to the industry. The industry requested the government to impose safeguards measures on imports in the form of a specific surcharge. 

 

In its recent World Monetary Outlook, the International Monetary Fund (IMF) has projected that the Jordanian economy will grow by 2.2% in 2020.

 

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