Jordanians stage nationwide strike to protest tax hikes law

The bill would increase the number of individual taxpayers from 4.5% of the population of 10.1 million to 10%.
Sunday 03/06/2018
Jordanians protest against a new income tax draft law in Amman, on May 30. (AFP)
Jittery mood. Jordanians protest against a new income tax draft law in Amman, on May 30. (AFP)

AMMAN - A rare nationwide strike, led by representatives of more than 33 associations, unions and societies, against an income tax draft law in Jordan paralysed businesses and service sectors in Jordan with calls for action to pressure the government to withdraw the measure.

Thousands of people gathered May 30 at the Professional Associations Complex in Amman and shouted slogans against the government and the income tax law. Shops and other private businesses displayed signs stating: “This shop is against the new income law and we are with the strike.”

Despite warnings by government officials to their employees not to participate in the strike, many did.

“We cannot take it anymore. A person cannot handle several blows and survive,” said a 38-year-old married government employee, who spoke on condition of anonymity.

“I work for one of the ministries and I truly don’t care anymore. We need this law to be withdrawn and we need to feel secure again. This is the first time the Jordanian society has risen as one against the injustice of the government so there should be something wrong happening to us as people.”

The Jordanian industrial sector, which employs more than 230,000 people, said in a statement that the law would “contribute to less foreign investments and the closures of factories and will consequently lead to the loss of jobs for many Jordanians.”

The proposed law, which needs to be endorsed by the cabinet, exempts individuals whose yearly income does not exceed $11,275 ($22,551 for families). The measure would place an extra 5% tax on the first $7,000 exceeding that threshold, 10% for the second $7,000, 15% for the third, 22% for the fourth and 25% for each $1.40 above that.

Almost every industry or service provider would be affected. Banking, financial and insurance sectors would pay a 40% tax, up from the current 30%.  The bill would increase the number of individual taxpayers from 4.5% of the population of 10.1 million to 10%.

Expanding the base of taxpayers is something that cannot be avoided, the deputy chief editor of the Jordan Times Mahmoud al-Abed said, “simply because this government has committed itself to that in the documents signed with the International Monetary Fund for a $700 million Extended Fund Facility programme.”

Nader al-Kassir, 40, owner of Al-Kassir Printing Press, said the strike was the last option for a battered society.

“The tax law will have a negative effect on all and we say ‘Enough!’ to the government that has increased many taxes on almost everything and we, as business people, we cannot handle it anymore and our employees who are working day and night to make ends meet cannot handle it anymore. We need the government to be a real government and to help citizens and not make their life harder,” he said.

“We know that tax in other countries such as Europe is high but there are excellent services, roads, better medical insurance, et cetera but what do we have here? The government said it is providing excellent services to us as citizens. Well I say they need a reality check,” he said.

“The Centre for Strategic Studies did a study and I think it makes sense (in pointing out that) the proposed new version of the income tax law needs to be accompanied by a reduction in the sales tax but I doubt it would happen.”

The Jordan Restaurant Association, which represents more than 1,000 restaurants, coffee shops, fast-food entities and bars, said in a statement that the proposed law would inflict huge damage on a sector that has been dealing with high operating costs, including professional licence fees, work permits, social security contributions and rising labour costs.

The Jordan Farmers Union also joined the strike. Its general director, Mahmoud Oran, said the law indicated that the farmers would have to pay taxes to the government whether they make profits or sustain losses and this was not right as it did not identify limitations on losses or profits for the agriculture sector.

The Jordan Medical Association, which has more than 140,000 members, called on its members to join the strike and treat only emergency cases. The Jordan Pharmacists Association requested pharmacies to close from 9am-2pm and the Jordan Bar Association asked its members to stop working.

Some protesters expressed anger with humour and satire. One wore a spacesuit with a sign saying: “We came from Mars to support Jordanians.” Another protester said: “I am an engineer and not an ATM.”

Others took to social media to say the government was taking in a lot of revenue from taxes on cars, houses and even sex, citing the rising prices for medication used to treat erectile dysfunction.

Professional associations warned that another strike would take place June 6. They said the next strike would call for overthrowing the government if their demands aren’t met.

Further inciting the public, the government announced on May 31 a fuel price increase of 5.5% — the sixth increase this year — and a 19% hike in electricity prices. Protesters in Amman focused on the Prime Ministry headquarters and security personnel intervened to prevent people from leaving vehicles blocking roads.

Video on social media showed demonstrators calling for the “fall of the government” and verbally attacking Jordanian Prime Minister Hani Mulki and his cabinet. Blocked roads and blazing tyres were shown on social media in all major governorates in Jordan.

The demonstrations continued until after Friday prayers June 1 when news that Jordanian King Abdullah II stopped the government from raising fuel and electricity prices helped calm the situation.