Rami Olwan

All About CyberLaw, Copyright and Developing Countries

When will the 16 percent sales tax on PCs be scrapped in Jordan?

Several weeks ago, it was announced that the Ministry of Information & Communication Technology (MoICT) was looking into exempting computers from the 16 percent sales tax.

The aim is to stimulate PC sales, ensuring that the number of Jordanian PC users increases, to achieve the goals of social and economic development.

Once enacted, this exemption will also make Jordan a more attractive re-export center, to neighbouring countries like Iraq and Syria. This would be good for local distributors.

It will also means that buyers don’t have to go to the Gulf to get a cheaper high-end laptops anymore, as regional prices will level-off.

Therefore, local computer dealers welcome this exemption, but are now suffering from a delay in its enactment!

The government is taking its time in making a final decision regarding this tax exemption, and the undesirable side effect has been a slump in PC sales; as people hold back on purchasing computers until the exemption goes into effect!

Some dealers are reporting a very significant drop in business; up to 90 percent in some cases! Apparently, customers walk into shops and ask, have you removed the tax or not? Can you blame buyers? If they read about a tax cut in newspapers, they ll want to make sure they benefit from it.

This lack of sales could have devastating effects on computer dealers. If it drags on for another month, some may even shut down.

Then, there s the issue of an enventory build-up . Some pessimists are saying that PCs become obsolete within months, and that this market situation makes it difficult to shift the whole inventory available of a PC model, particularly laptops. Is it worth the wait? For buyers, the answer is yes. When a desktop PC drops in price from JD300 to JD255, a whole class of Jordanians may be encouraged to purchase more machines.

For PC sellers, it s only worth the wait if the situation is resolved within days, not weeks. At the moment, it s not clear how long it will take.

So, all eyes are now on the government to take action. The sooner the better for everyone involved. Maybe, in the future, such sensitive tax cuts that affect the market will just be announced and enacted on the same day! It will save us all the pain of waiting.



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