Moody’s says new tax law vital for Jordan’s credit rating
AMMAN — Jordan’s income tax draft law will enable the Kingdom achieve a “positive credit rating” and enhance ongoing fiscal reforms in Jordan, according to a report by credit ratings agency Moody’s.
The report, a copy of which was obtained by the Jordan Times on Sunday, indicated that the bill would help reduce public debt, as it would increase revenues by JD300 million, or about 4 per cent of 2017 revenues and around 1 per cent of the gross domestic product.
“The bill would help enhance fiscal stability and reduce the financial deficit to 1.9 per cent of the total GDP by 2019,” the report indicated.
The draft law, the agency indicated, would help contain tax evasion, which reaches around 80 per cent in some sectors.
According to the agency, Jordan’s current credit rating is B1 (stable). It commended the establishment of a financial investigations unit as stipulated by the law, and the stiffening of penalties that will help curb tax evasion by both individuals and corporations.
The credit agency highlighted that Jordan is home to 1.4 million Syrian refugees, representing some 20 per cent of the population of Jordan, and that the rise in population resulted in increased government expenditure on social services amidst a decline in foreign grants.
The bill, it said, would help reduce the ratio of public debt to GDP to 82.2 per cent by 2021, from 95.3 per cent at the end of 2017.