According to amendments to the Income Tax Law that will be discussed in the Cabinet later this week, individuals in Jordan earning a gross annual income over JD 8,000 will be subjected to a five percent tax, the government announced on Sunday. For families the five percent tax applies for income after the JD 16,000 limit.

Previously, individuals and families earning less than JD 12,000 and JD 24,000 respectively were exempt from the annual income tax.

The lowering of the first tax bracket is not the only amendment the bill aims to introduce. Previously, income between JD 12,000-22,000 was taxed with a rate of seven percent, while in the new bill individuals earning JD 13,000- 18,000 will pay a 10 percent tax, and income between JD 18,000- 23,000 will be taxed at a rate of 15 percent.

The 20 percent tax was previously reserved for income over JD 32,000, while in the proposal the income between JD 23,000-25,000 will be subjected to that percentage.

There are two additional tax brackets, whereas the the current Income Tax Law only has three. The highest tax that is currently imposed is 20 percent, whereas if the the amendments are adopted that would be increased to 25 percent for individuals that earn over JD 28,000.

The bill will be presented by the Legislation and Opinion Bureau before it is put to vote in the parliament and according to the Ministry of Finance, the Treasury will gain additional JD 280 million from the amendments.