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Income & Sales Tax Department

The Income Tax Department and the General Sales tax Department were merged in one Department on 16/8/2004 under the name of Income and Sales Tax Department by the amended law of each of the Income Tax Law and the Sales Tax Law, published in Official Gazette No. 4672 on 16/8/2004.

Historically, The Income Tax Department was a division under the ministry when the first income tax law was issued in 1933 until it became an independent department in 1951.  It has exercised its work under the Law No. (50) for the year 1950 and since then tax legislation came through several amendments for the purposes of developing legislations, keeping abreast of economic and social changes and fill the gaps arising as a result of application. The Hashemite kingdom of Jordan is considered one of the first countries in the region that has introduced the "self – assessment" concept according to provisional income tax law provisions No. (34) for the year 1982. Then the income tax law No. (57) for the year 1985, that has been effective since the provisional law No. (28) for 2009 was issued. This law aimed to motivate the national economy and encourage the investment atmosphere and simplify the tax system procedures through improving legal framework, and mitigation tax burden on most of the citizens by exempting large percentage of medium and limited income. Finally, the issuance of income tax law No. (34) for the year 2014, that get back the progressive tax which was a requirement for all the economic and social categories.

The sales tax has begun as an excise tax in 1926 and concluded to the current format of the sales tax which came into force on 1/1/2001 under the law No. (36) for the year 2000. It is tantamount to a system of value added tax applied internationally, as the legislation passed in many stages of development before reaching the current format; the last amendment was in 2009 under the provisional law No. 29 for the year 2009 amending the GST law which is read with law No. (6) for the year 1994 and amendments. The last amendment aimed at achievement of equality and justice among taxpayers, encourage investment, reduce double taxation, comprehensive reform in sustainable social and economic development process framework, maintain the rights of both the treasury and the taxpayer.

The last amendment relies on a group of main basics that aim to achieve the harmony among tax legislation system. The most important of these reforms is unifying procedures for both income and sales tax that enhance the transparency and clearance in tax treatment.  

The department works with two separate laws; one for income tax and the other for sales tax.

Objectives: 

ISTD aims to supplement treasury with revenues. Therefore, it undertakes the following:

1.   Manage the process of taxation, verification, collection effectively and efficiency and   following up the procedures and working on increasing tax compliance and voluntary response to taxpayers.

2.   Raising up tax awareness and inform taxpayers of their rights and their duties

3.   Limit tax-evasion

4.   Revise, evaluate and update tax policy regarding income tax, sales tax and value added tax.

 

The responsibilities of the department:

Tax policy is considered the most important components of the fiscal policy. Since objectives are the basic frameworks that identify any policy and they are the economic expression of the prospects of such policy, the goals of tax policy in Jordan are represented in supplying the treasury with the required revenues to finance the general expenses, encourage savings, investment, positive impact on consumption and price- stability and achieving justice and social equity by re-distribution of incomes.

Tax policy in Jordan requires emphasis on the balanced equation between tax authority and the taxpayer's rights which demands providing tax service and enhance voluntary compliance of taxpayers.  To achieve harmony between tax system and the national development goals, the department sets its mission through converting it into procedural objectives that are translated into specific tasks and procedures forming the department action plan.

From this perspective, the department has achieved high growth rates in revenues in the past years that exceed economic growth rates. This might be attributed to the following:

1.   Broadening the tax base by encompassing targeted sectors that were not committed to pay the tax due, and reducing registration threshold on sales tax to cover the largest possible number of registered taxpayers

 

2.   Activation the information and investigation system, which led to the reduction of tax evasion.

 

3.   Adopting the principle of self- assessment has enhanced trust and credibility between the department and the taxpayers. It also helped raising  the voluntary compliance level resulted in a large decrease in numbers of cases at courts.

 

Persistent development and improvement in the tax legislations have helped creating a better investment atmosphere and contributed to achieve greater transparency in dealing with the taxpayers.

 

Achievements:

Tax department is considered one of the excellent departments at the public sector level .Before the merge, It has got the 4th rank among (25) organizations competed on king Abdullah the 2nd Award for Excellence of Government Performance and Transparency in 2003. Further, Sales Tax Department has got the 6th rank within Award competition criteria.

Seeking toward Excellence, the department continued to participate in king Abdullah the 2nd Award for Excellence of Government Performance and Transparency, the department has got the 3rd rank of the participated organizations and departments for more one time within one session period for the year 2013.

In addition, four directorates of the department participated in Excellence Government Service Award in 2014. Every directorate has got the award with two stars in comparison of one star for each in 2013. The department also is looking to participating in Innovation and Creativity Award for the first time next year.

Furthermore, the E- site of the department attained the both Awards; the Designed Innovation and the Structural Innovation for the years 2010, 2011 respectively from Arab Organization for Administrative Science which affiliate to Arab University.  

The most important points of excellence in the department are:

1.     The number of qualified employees holding university degrees (Bachelor, High Diploma, Master, Ph.D.) amounted to (938) employees, forming (68%) of total employees. All employees have trained in various specialized knowledge field. The average of trainees amounted to (93%) of the employees.

 

2.  Income and sales tax department is a pioneer in using computers among governmental institutions. A main computer was purchased and installed including modern data base (Oracle) and processing systems (Unix). Also modern communication networks were put in service that linked the main department with all its directorates in the governorates effectively. It also adopted the well- known international VIPs system for sales tax data processing.

 

 

3.   The department has started to simplify and speed up work procedures to be more effective, along with preparing several manuals that cover all aspects of the department. All the procedures related to such services have been programmed and centrally monitored by Internal Control Directorate to follow up dealing with customers through a monitor to identify the delay in any procedure.

 

4.   All implicit knowledge of the department was documented; in addition, all procedures were filed and classified to be easily referred to.

 

5.   The department adopts team working to study any new developments and problems along with a special system for employees and taxpayers' suggestions.

 

6.   The department has been adopting comprehensive Quality Management System ISO 9001 since 2005. The system is applied to all administrative and technical procedures in the department. Besides, it is applicable to the accredited forms for all the procedures that are updated continuously. Also the procedures are reviewed annually to check whether they complied with ISO 9001 system. This is done by studying the department's structure, duties, activities, available recourses and the services provided at every division level. The connection of each division with every unit is identified . The department also considers the needs from human resources, techniques and mechanism to achieve the objectives of the department.

 

7.  The department was the first governmental organization launching E-services at State ministries and institutions level in the beginning of 2005.The department was also one of the first ministries and institutions that launched the second stage of the E- services in the beginning of 2010 at the level of selected of E – services within E – government program. Moreover, the department has made a head start to apply integrated E – services in 2015. The last application of it was E – payment. The department provides such services in order to activate the use of technology. It is a means of improving services for citizens rapidly. Besides, it is a way of insuring the continuous availability, reduction of services' costs and achieving a high degree of transparency in government procedures.

 

8.  The department has gone a long way in computerization process; particularly the system of archiving funded by the Royal Court by the order of His Majesty King Abdullah the Second Bin Al-Hussein.

 

 

9.  The department adopted a modern system to arrange and index files that enable the employees to refer to them easily.

 

10. Applying the single window service at many directorates. It started at West Amman Directorate after establishing Customer Service Directorate. A service unit in each directorate has been emanated from Customer Service Directorate to apply centralized service as instructions were developed and employees were trained on how to deal with customers and deepen customer service culture in order to cover all the directorates.

 

 

11. providing E – payment service by E- Fwateerkom program in collaboration with the Central Bank of Jordan. This service facilitates the procedures for taxpayers and save time, efforts and money. In addition, receiving tax returns through Commercial banks and Jordan post companies' offices.

 

12. The adopting of a private company for the purpose of refunding sales taxes to travelers and tourists who visit Jordan, which contributes to the promotion of tourism in Jordan. The service started at Queen Alia Airport. It will be functioning in all kingdom border points.

 

13. The department concerns about its commitment towards society representing in awareness and education to spread tax knowledge among community and stakeholders, through conducting free courses at the department all the year around, or at civil society corporations such as, unions, Industrial and Commercial Chambers, etc.  Besides, free manuals and brochures are distributed to taxpayers. ISTD publishes most of the data in both languages; Arabic and English on the website and through media. Issuing tax awareness newsletter is part of awareness campaign. Training programs, seminars, meetings, workshops and providing assistance to students of universities are also essential parts of spreading tax awareness.

 

 

14. Open-door policy is adopted by the department at all levels. The taxpayers will not find any obstacles to reach senior management and meet the Director General who specifies one hour daily to meet the taxpayers without prior appointment. This creates comfortable atmosphere between service provider and recipient.

 

15. The department has divided the tax periods into odd and even periods for the purposes of reducing the burden on the taxpayer as well as the employees and providing better services.

16. The department has concluded about (33) agreements of avoidance of double taxation with several countries and organizations and international bodies. All these agreements are effective. There are many agreements under consideration to prevent local and foreign investors from falling into double taxation in order to encourage investment.

 

17.  As a part of its strategy, the department is committed to fulfill its obligations to the citizens, which are as follows:

a- Good reception with proper guide signs.

b- Answering the caller properly without ignoring any call.

c- Disclosing Service provider's identity.

d- Providing the possibility of sending tax return by mail.

e- Providing the possibility of sending tax return by post offices if needed.

f- Setting dates in advance for visits or meetings.

 

18.  The department is keen to instill high and noble values in its employees as a part of the supportive institutional culture to provide better services to the public:

a- Team spirit

b - Treating the taxpayer as a partner

c-     Fairness and Equity

d-    Integrity and Credibility

e-   Confidentiality and security of information

f-    Transparency and professionalism.

 

19.  In order to make the best use of available resources, the department has established the four Directorates; Large Taxpayers directorate, commercial directorate, industrial directorate and service directorate. The purpose of these directorates is providing better services in all aspects, whether administrative, technical, controlling or other.

20.  The department has excellence technical and administrative expertise that made it a model in the region. Therefore, it is keen on international cooperation in various fields to deepen its experience through participation in international conferences, exchange of experience, and the reception of Arab and foreign delegations which would like to benefit from the Jordanian experience

 
     
         
Income and Sales Tax Department
   
   
 



 
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