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The
Jordanian Government has prepared a new
draft law (the Draft) amending the
Investment Promotion Law No. 16/95 (the
Law), which was introduced to the
Parliament in its extra-ordinary session
of summer 1998. The Draft contains one
amendment under which the Cabinet is
empowered to grant investors incentives,
assurances and other privileges in
addition to the exemption from custom
duties, income tax, social services tax
and other taxes set out in the Law. The
justifying reasons for the amendment
state that experience proved that
exemptions from income and social
services tax were not sufficient to
attract investors to invest in category
(c) of development areas, and the bulk
of investment still concentrates in
development areas (a) and (b).
Therefore, as was mentioned in the
reasoning, the Draft was proposed to
give the Cabinet sufficient flexibility
to grant appropriate incentives to
investors in order to direct investment
towards remote areas in the Kingdom and
to attract large international
investment projects.
It is worth noting that since 1985 until
now four laws relating to promotion of
investment in Jordan, other than the
laws of the Jordan Investment
Foundation, have been promulgated. In
addition to this, twelve (governmental)
regulations relating to investment were
issued since 1985. Among these
regulations, six are related to Arab and
foreign investors, three for investment
areas and sectors, one for the standards
and basis relating to the approved
economic projects (as per the law No.
11/87) and one for organizing the
Promotion Investment Department.
Investment sectors benefiting from the
Law are industry, agriculture, hotels,
hospitals, maritime transport, railways
and any other sector of investment the
Cabinet decides to add upon the
recommendations of the Higher Council
for Investment Promotion (Art.5). Based
on this authority, the Cabinet has added
two sectors of investment to those
benefiting from the promotion of
investment incentives. These new sectors
are leisure and recreational compounds,
and exhibitions and conference centers
(Official Gazette, 997, p. 4050).
To achieve the purposes of the laws and
regulations of investment in Jordan, it
is supposed that the rules relating to
investment should be interpreted widely
for the best interest of the investor
whenever possible. Nevertheless, the
Investment Promotion Committee refused
to exempt the vehicles of a hotel from
customs duties on the ground that there
is no express legal provision in the Law
to this effect. This resolution was
upheld by the High Court of Justice (No.
97/97, BAJ, 1998, p.778).
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