Jordan’s Telecommunications Regulatory Commission (TRC) is studying a plan to increase government income through a gradual increase of its share of revenues from telecommunication companies.
The government collects a 16 per cent sales tax, 12 per cent special tax and 24 per cent income tax from the telecom sector in addition to 10 per cent from a revenue sharing agreement.
“We are examining the impact of a higher per centage of revenue sharing,” TRC Chief Commissioner Mohammad Taani told reporters.
“We are analysing companies’ profits and comparing the per centage Jordan gets with that of other countries in the region,” he saod.
The TRC study will be completed soon, Taani said, adding that the ceiling will be 20 per cent.
“The study seeks to strike a balance between the situation in Jordan, countries in the region and the world,” he said pointing out that the Iraqi the government gets 18 per cent under revenue sharing agreement with telecom companies.
Executives of Jordanian telecom companies say that any possible increase will negatively affect the sector which contributes about 300 million dinars ($420 million) annually to the government in taxes and fees.
“Any increase in revenue sharing will be disastrous and will harm the sector,” according to the chief executive of a major telcom player in Jordan. Jordan has what industry expert describe as a highly developed communications infrastructure.
The kingdom’s telecom infrastructure is growing at a very rapid pace and continually being updated and expanded. Jordan’s telecom industry remains the most competitive in the Middle East, experts say. Major players in Jordan’s telecom sector include Orange, Umniah and Zain.
According to TRC figures, mobile phone penetration in the kingdom reached 120 per cent by the end of 2011.