Oman Two days before its departure, the previous Jordanian government approved a progressive increase in taxes on the highest-priced segments of electric cars and a reduction in the special tax on gasoline vehicles, a decision that received negative reactions and a wave of controversy on the Jordanian street and among investors in the vehicle sector, which Putting the new government in a difficult confrontation with the consequences of the decision.
The government decision stipulates that a 10% tax be imposed on the import of fully electric cars whose value does not exceed 10,000 dinars ($14,110), and the rate rises to 40% on cars whose value ranges between 10,000 and 25,000 dinars ($35,271). ), and 55% on cars whose value exceeds 25 thousand dinars.
The government justified this increase by reducing the gap between gasoline cars and electric cars, with the aim of preserving the rights of investors in the vehicle market, a step that was welcomed by some vehicle dealers, especially owners of traditional international car dealerships, who saw the decision as fairness to them.
This comes amid the trend of many Jordanians buying electric vehicles due to the financial savings they achieve compared to their counterparts that consume fuel, as well as their low prices compared to gasoline cars, with the reduced fees that were applied to them before they were raised.
Fears and reluctance
Raising the special tax on electric vehicles had negative effects on the sector as a whole, according to the Vice President of the Free Zone Investors Authority, Sharaf Al-Din Al-Rifai, who confirmed that no customs clearance process had been carried out for any electric cars whose value ranges between 10 thousand dinars and 25 thousand dinars since. Issuance of the latest tax amendment decision.
Al-Rifai said in an interview with (Al Jazeera Net) that there is a “complete reluctance” of citizens to buy electric cars, due to the high customs value on them, explaining that before the previous government’s decision to raise the tax on electric cars was issued, 4,000 electric cars were customs cleared daily. After the government decision, clearance of electric vehicles stopped completely in the free zone.
Al-Rifai expressed his hope that the new government headed by Dr. Jaafar Hassan will reconsider the decision to raise the special tax on electric cars, saying: “We view Dr. Hassan’s government with a lot of optimism, especially since he is a man in the field, and therefore we invite him to visit the free zone, for dialogue and to reach the desired solutions together.” “We are not against any decision or law issued, but what we want is for government decisions to be issued in partnership with the private sector and stakeholders.”
Government position
For his part, and in the first official comment on the decision to raise the tax on electric cars, the Minister of Government Communications, the official spokesman for the government, Muhammad Al-Momani, said that “the government is convinced that decisions are based on continuity, and that any decision must take a period of time to measure Its real impact before it is re-evaluated.”
The Jordanian minister added in a statement to (Al Jazeera Net) that the policy that was applied nearly ten years ago with electric cars was evaluated by the previous government, and accordingly the change took place, and it is natural for the decisions and their impact to be reviewed after this period of time, according to him.
He added: “Nevertheless, the government is in contact with the relevant authorities, respects all opinions, and is ready to discuss and hear the opinions of all concerned.”
Al Jazeera Net learned that commercial transactions related to conducting customs equations on new electric cars are still pending a decision by more than 400 dealers working in the automobile sector, due to the rise in the price of a single electric vehicle according to the new government decision by between 6 thousand dinars (8 thousand and 465 dollars) to 15 thousand dinars (21 thousand and 162 dollars), while the price of some cars increased by about 20 thousand dinars (28 thousand and 217 dollars), depending on the model and year of manufacture.
Negative effects
In turn, economic expert Hossam Ayesh said that the government has confirmed since the beginning of the year that there will be no new taxes on citizens, and no tax hikes, but it came before the formation of a new government to raise taxes on electric cars, suddenly and without prior warning, stressing that this will negatively affect the market. Cars, which will weaken the demand for their purchase.
Ayesh added in an interview with (Al Jazeera Net) that last year, 2023, customs clearance for electric cars increased by 146%, and today we find a significant decline in the clearance rate for electric cars, and thus car dealers are in trouble, and the government will not obtain the required revenues, at the same time. Citizens will not go to gasoline cars due to the high cost of fuel.
The demand for electric cars in Jordan rose by a record 122% during the first quarter of this year compared to the same period last year, amid intense competition between car agencies and dealers. The high demand is due to the increasing prices of petroleum derivatives and the high costs that result from the acquisition of fuel-powered cars. It constitutes a large portion of spending on other basic requirements.
