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Jordan’s higher telecom taxes impede plans to become regional ICT hub: Telcos

Jordan’s higher telecom taxes impede plans to become regional ICT hub: Telcos

AMMAN: The recent tax hikes on Jordan’s telecom sector will increase the burden on the “heavily taxed sector”; instead, it is vital to revamp the whole legislation and the taxation system governing it, according to telecom providers.

The newly introduced taxes represent an impediment to the advancement of the sector’s investments, and are likely to affect Internet penetration in Jordan, which is working towards becoming an ICT hub in the region, they added.

“By resorting to increasing taxes on the telecom sector to generate more revenues, the government is ignoring the core issues and challenges facing the economy…There are electricity and water thefts annually, and the volume of waste is huge. Why not to address these issues?” asked Raslan Deiranieh, deputy CEO and chief financial officer at Orange Jordan.

“Why is the solution to generate more revenues is to punish this successful sector?” Deiranieh told The Jordan Times in an interview this week, adding that the government has repeatedly referred to tax evasions.

Last week, the government scrapped a “100-per-cent sales tax exemption” on fixed and mobile Internet services, effectively raising the tax rate to 16 per cent, from 8 per cent.

Internet penetration reached 87 per cent by the end of the third quarter of last year, with some 8.6 million users, according to official figures. In addition, the Cabinet decided to impose a JD2.6 tax on the purchase of new mobile SIM cards — prepaid or post-paid — as of February 15.

“We were promised by the government that there will be a revamp of all taxes and regulations governing the sector, as licensing fees are high and frequency fees are high,” said Deiranieh.

“All telecom operators are in debt at present, and if these promises are not fulfilled, the sector will be in a very bad shape in two years, and we won’t have more money to invest,” he warned.

The executive added that the government needs to look into the impact of digital economy, as reservations of hotels, tickets, purchase of apps and many things are now being done online.