Tax evasion common among Jordanian family businesses

Jordan

Published: 2018-04-28 14:46

Last Updated: 2024-03-24 22:42


Family businesses comprise a large proportion of general partnerships and limited partnerships.
Family businesses comprise a large proportion of general partnerships and limited partnerships.

According to a study conducted by the Income and Sales Tax Department, Jordan harbours around 132,000 companies that practice some form of tax evasion, Petra news agency reported on Saturday.

The companies evaluated in the study are all formally registered entities and pay around JD 60 million annually in income tax which the study assessed as an indicator of tax evasion.

When the total amount is divided by the number of companies the average income tax paid by each of those companies, mostly general partnerships and limited partnerships, amounts to JD 455 annually.

The study pointed out that the small amount received as income tax from those companies “is a clear indicator of the existence of tax evasion for family businesses which are a large proportion of the general partnership and limited partnership entities.”

The study asserted that analyzing the sales tax revenue generated by imports and local goods by the companies examined pointed to the large scale and prevalence of tax evasion, as the volume of sales surely meant more income.

Finally, the department called for the need to implement measures to curb the practice as it incurred great losses to the total tax collected by the government, stressing on the positive correlation between the grey economy and tax evasion.