Jordan’s Designate Prime Minister Omar al Razaz said his government will withdraw a controversial income tax law amendment that triggered widespread protests across Jordan, local media reported.
Arab Potash Co. (APC) Chairman Brent Heimann had warned that Jordan’s proposed draft law amending the country’s Income Tax Law would impose new financial burdens on the company and might derail its ability to implement approved plans for expansion and investment, according to a press statement published in The Jordan Times.
The controversial amendments to the bill, put forward last month, focused on boosting tax revenues, improving tax collection, and curbing tax evasion. If implemented, Jordan’s mining companies would pay 30 percent on each dinar of income, compared with the current 24 percent.
Heimann said over the past four years, APC has put a strong emphasis on cost reduction, particularly energy costs, and a tax hike will cause the improvement the company has achieved to evaporate. Any increase in taxes, he said, would reduce the company’s profitability and weaken the competitiveness of the Jordanian potash industry on world markets. The chief executive also warned that if the income tax rate was raised as per the draft law, “it would force APC to re-examine the economic feasibility of its current and future expansion projects.”
The company is currently working on a JD130 million project to increase potash production capacity by 180,000 mt/y (GM Nov. 10, 2017). At the end of third-quarter 2017, it completed an expansion of its granular potash production capacity by 250,000 mt/y, to 500,000 mt/y (GM Nov. 10, 2017).
Heimann said the Jordanian government, which holds a 26.9 percent stake in APC, and the country’s Social Security Corp. a 10 percent stake, should be working to maintain the profitability of the company, not imposing more taxes on it.
On June 5, Jordan’s King Abdullah II called for a review of the draft law after more than a week of anti-austerity protests that have swept the country and led to the prime minister’s resignation on June 4.