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Ammon News - by Omar Obeidat/ Jordan Times

Traders, importers welcome government clarification

AMMAN – Finance Minister Umayya Toukan on Thursday said there are no plans to reduce taxes on hybrid cars, an announcement met with relief by automobile traders and importers.

In a statement e-mailed to The Jordan Times, Toukan said a government decision taken in June last year to reduce the special tax on fuel-efficient cars proved to be sound as demand picked up, adding there is no need to further cut the tax rate.

Under the decision, the special tax on hybrids with engines smaller than 2,500 CC was reduced from 55 per cent of the value of the vehicle to 25 per cent, while those with larger engines are subject to a 55 per cent tax.

Over the past three weeks, media reports on a government plan to remove taxes on small-engine hybrid cars caused confusion in the automobile market.

The reports were prompted by remarks made by Minister of Energy and Mineral Resources Malek Kabariti at an energy conference, where he said the government was considering annulling taxes imposed on hybrids and allowing their usage as taxis in a bid to improve the quality of cars in the country and reduce the Kingdom’s increasing energy bill.

Commenting on Toukan's announcement, Nabil Rumman, president of the Jordan Free Zone Investors Association (JFZIA), said car importers had asked the government to clarify its plans in order to end speculation and chaos in the auto market as many potential buyers put their purchasing plans on hold, waiting for a government decision.

Rumman, who heads the syndicate that represents importers of used cars, described the announcement as a relief for the market.

“We have been waiting for the government to announce whether they plan to remove or keep taxes on hybrids,” he said, noting that since June 17, when the news reports of possible tax cuts surfaced, the hybrid market has been at a standstill.

“Since that date no hybrid cars have been sold,” Rumman told The Jordan Times over the phone, adding the auto market's activities will resume as usual after the government clarification.

According to Rumman, 5,139 hybrid cars were imported during the first six months of this year.

JFZIA figures made available to The Jordan Times showed that 20,712 cars, both conventional and hybrid, entered the local market between January and June this year.