Customs Law
Reaching more than JD 1billion in 2006, taxes on imports are the primary source of domestic revenue in Jordan. This explains the early establishment of the customs department in Jordan which took place in 1922. All imported goods are subject to custom duty, except those specifically exempted. Rates of duty vary according to the importance of the item to the national economy. Essential commodities and various raw materials attract relatively low rates of duty, while luxury goods attract higher rates.
Under the prevailing Import Tariff Schedules, valid since 1989, a high tariff rate is imposed on luxury goods and on major categories of consumer goods. However, in order to stimulate export production, import tariffs are low on many raw materials, machinery and semi-finished goods. To secure tariff exemptions, businesses must document that the raw materials to be imported will be used in export production, maintaining at least 40 percent Jordanian value-added content.
The Director General of Customs may grant temporary admission status to certain goods such as heavy machinery and equipment used to implement government projects or important projects which have obtained government approval. Foreign construction companies operating alone or with a Jordanian partner can apply for this temporary admission status.
Customs play an important role in investment and trade. Jordanian laws provide the investor with total customs exemptions on imported fixed assets, ease of licensing and registration procedures, and freedom from customs duties for export industries on imported raw materials. However, customs procedures in Jordan have historically been a major impediment to free trade. Overlapping areas of authority and excessive signature clearances on paperwork of shipments remain unchanged. Actual commodity appraisal and tariff assessment practices often differ from the written regulations. Discretionary decisions are sometimes made about certain cases that are subject to conflicting instructions and regulations.
The Jordan Customs Department, in cooperation with the USAID-Funded AMIR Program, was working for more than a year and half on a program for the purpose of upgrading Customs services. This program will strengthen the national economy through providing an excellent civil service system for various sectors dealing with the Customs Department. It will also reinforce the principle of real partnership between Customs and the private sector based on joint responsibility and mutual cooperation. The Program further aims at enhancing the trust in the Jordanian investment environment by facilitating the procedures of goods movement across borders, especially with regard to Jordanian exports.
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