AMMAN - The Cabinet on Tuesday endorsed a number of exemptions for the information and communications technology sector (ICT).
Minister of State for Media Affairs and Communications and Government Spokesperson Nabil Sharif said the exemptions came in implementation of the national programme for financial, economic and social reforms to stimulate the economy and to enhance the living standards of Jordanians.
Under the new incentives, exported ICT services will be exempt from income tax including computer services, economic feasibility studies and the services related to legal, engineering and audit consultation.
Companies providing broadband telecommunication services will be exempt from annual fees provided that these exemptions reflect on the services provided to people either in terms of prices or expansion outside the capital, Sharif explained.
During Cabinet meeting, chaired by Prime Minister Samir Rifai, the government also decided to reduce and unify sales tax on Internet services at 8 per cent regardless of the technology used or the beneficiary, which will be effective as of the beginning of next month.
According to previous regulations, sales tax on Internet connections for households was 8 per cent, while it was 16 per cent when the beneficiary was a commercial or business outlet, and the same tax was imposed on wireless Internet. Under the new incentives, the tax levied will be 8 per cent for the three types of services.
Earlier in the day, Rifai announced that the government will take a series of measures to support the IT sector, including expanding tax exemptions.
Addressing a ceremony marking the 10th anniversary of Information Technology Association-Jordan (int@j), the premier said that despite the difficult global economic climate, the government will work to bolster the sector, such as extending the tax exemption on revenues generated by IT exports.
Jordan's IT exports stood at around $209 million in 2009, compared with $226 million in 2008 and $196 million in 2007, according to int@j.
The premier highlighted that the government considers the IT sector a success story, and will not hinder its growth in its attempts to address the budget deficit.
The IT sector contributes around 14 per cent to the gross domestic product and employs about 14,928 employees, 24 per cent of whom are female, according to a recent survey by int@j.
He also commended int@j's achievements over the last decade, adding that the association is a model of partnership between the public and private sectors.
At the ceremony, Minister of Information and Communications Technology Marwan Juma said officials will work to ensure that the sector continues to be competitive at the international level.
Also during the event, int@j Chairman Ayman Mazahreh said the IT sector generated $2.2 billion in revenues in 2009.
By Mohammad Ghazal and Petra
© Jordan Times 2010
