A Diamond’s Eye View of the World

a multi-faceted look at the middle east, and the middle west

Putting safety last: Jordan’s new tax law

Posted by adiamondinsunlight on April 14, 2007

This article breaks my heart. The Jordanian monarchy expends great time, effort, and money to convince the world that it is forward thinking and Western looking.

But what kind of government institutes a car tax that discourages consumers from buying cars with safety features?

A tax on luxury cars? fine.

But a tax that targets safety devices? What kind of government does this to its citizens?

(MENAFN – Jordan Times) AMMAN — A government decision to apply sales tax and other tariffs on vehicle safety devices has already raised car prices and will surely hamper efforts to improve the Kingdom’s road safety record, car dealers and citizens said Thursday.

The decision, which went into effect Wednesday, has caused a rise, ranging from JD200 to JD6,000, in the prices of new cars and will also affects the prices of used cars, several car dealers told The Jordan Times.

Citizens with limited incomes looking for cars worth around JD12,000 will have now to pay around JD1,000 extra. “If they want to save this amount, they would opt to buy a car with less specifications, particularly those pertaining to safety, such as ABS (anti-lock brake system) and airbags,” said Abu Khaled, who works at an auto agency on western Amman’s Wadi Saqra Street, criticising the decision which he said caused confusion in the market.

Head of the customs office at the Zarqa Duty Free area, Mahmoud Dweiri, said the rise in car prices ranges from JD200 and JD2,000.

Dweiri told the Jordan News Agency, Petra, that luxury cars usually have more safety measures and thus will have a considerable rise in their prices.

Director of Al Abrar Wal Rafidain Clearance Agency at the free zone, Mohammad Abul Tayyeb, agreed, but said that the rise in prices exceeds JD2,000 for some brands, particularly large four-wheel drive cars.

Mohammad Hassanein, an Egyptian worker at a car agency, said several cars on sale at his company went up by around JD6,000.

The government on Tuesday decided that safety devices installed on vehicles should be subject to sales tax and unified tariffs starting from Wednesday. This decision suspended a previous one dated September 24, 2006, which exempted these devices from sales tax. The new decision was based on a recommendation by the Jordan Customs Department (JCD), which indicated that these devices have become essential for all vehicles and are no longer optional.

Among the devices that are included in the decision are the ABS, airbags, anti-pollution systems, anti-skip systems and many others.

The Car Agents Association on Thursday called on the government to reconsider its decision and to discuss it with all concerned parties.

Leading car brand agents in the capital disagreed with the JCD. “The agents can ask the manufacturer to exclude some of the safety devices,” sales manager in the Ole Group, a leading car brands agent in the Kingdom, Majdi Nashashibi, told the Jordan Times, without specifying any of these devices.

“Over the past two days, the number of visitors to our showrooms declined sharply,” Nashashibi told The Jordan Times Thursday evening. He claimed that “the decision will reflect on the public more than us,” adding that citizens will have to pay more for their vehicles.

He also said the decision will prompt agents to import more vehicles with fewer safety devices to maintain their sales level, which would reflect on safety levels on the road.

Mohammad Salameh said he was looking for a car with all safety devices, but after the new decision, he is now focusing more on the price of the car.

“I am looking for a car worth around JD12,000 and dealers were telling me that I should’ve come earlier this week because I would have saved some JD1,000,” Salameh, an employee at a private company, lamented, while walking between shiny cars lined up in front of a car dealership.

As for the safety devices, 42-year-old Salameh said: “God is my sole protector.”

“The government doesn’t care for people’s safety, it only cares about getting money out of their pockets,” he complained.

Road accidents continue to be one of the leading causes of death in the country. According to police statistics, around 18,000 people have been killed in road accidents over the past 20 years.

According to Traffic Department figures, 865 people were killed last year.

Around 18,000 people were injured during the same year in over 80,000 accidents that cost the country around JD250 million in losses annually, Jamil Mujahed, head the Road Safety Youth Fund, told The Jordan Times in a recent interview.

Last month, the Jordan Insurance Federation, dealing with compulsory insurance for motor vehicles, reported a JD12 million loss during 2006 due to the increase in the number of accidents.

2 Responses to “Putting safety last: Jordan’s new tax law”

  1. S. Worthen said

    C. read the article more carefully than I did and observed that Jordan is becoming more Westernized by doing exactly what it’s doing in this article. What it’s doing is applying sales tax to safety features which were previously tax-exempt. Safety features on a car are not tax exempt in any country I’ve ever lived in. Yes, the some of the consequences – as outlined in this article – are unfortunate. But they’re not doing anything that most other Western countries haven’t already done.

  2. Mmmmmm bravo C. for reading so closely – I missed that, too.

    It still makes me uncomfortable – but now I have no good reason for my feelings.

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