Jordan News

Emad Abdel Karim

The car trade sector in Jordan is preparing for a new recession, especially the hybrid car market, which is preparing to raise the special tax rate on it by up to 10%, starting from the beginning of next year 2022, to reach its own tax to 55%, as approved several years ago by previous governments.

Occupants, representatives of the sector and car dealers believe that the decision will increase the value of hybrid cars by an amount of no less than two thousand dinars per car, but at the same time the market for these cars will witness a major stagnation, as happened in previous years when the government approved the imposition of the special tax at 55% and then retracted it. to 30% only, with a gradual re-raising until it reaches 55%.

This expected recession will increase the burdens of traders, the market and workers in this sector, in addition to increasing the burdens of citizens represented in the search for alternatives by returning to owning gasoline cars with high expenses due to the rise in fuel prices or fully electric cars.

The hybrid car market will witness a stagnation of 70% next year

The head of the Jordanian Free Zones Investors Association, Muhammad Al-Bustanji, believes that the decision to increase the special tax fees in force since 2018, and with a gradual increase, will contribute to stopping the clearance of this type of cars by a very large percentage that may reach 70%.

He added in a statement to “Jordan News” that the homeland is looking for a decrease in prices and not an increase in them, as the purchasing power is almost limited, and therefore the imposition of this tax will be reflected on the prices of hybrid cars in amounts that may exceed 2000 Dinars for the car, and therefore you will not find a great demand for it.

And he indicated that this shortfall in clearance for hybrid cars will go to the demand for fully electric cars or petrol cars, noting that fully electric cars witnessed activity in clearance during the current year, reaching 5,000 cars, and it is expected that this number will double next year to 10,000. car and more.

Al-Bustanji pointed out that fully electric cars are witnessing a great demand by citizens, as they are an acceptable car in terms of their prices and have no mechanical problems, in addition to their most important features that they are economic in energy expenditure, as they have developed and increased the capacity of the battery in them to travel a distance of up to 500 kilometers continuously in the shipment. the one.

And he indicated that the value of electric charging or energy consumption for this type of car is very low compared to the fuel prices that can be consumed for the same distance in other cars, which makes it an acceptable and required car in the market.

A step in the wrong direction and with no economic reward

The expert and economic analyst, Muhammad Al-Bashir, considered that the decision to raise the special tax on hybrid cars is a negative decision, not a positive one, and it constitutes a step in the wrong direction, and that the government’s origin is to encourage consumers to deal with this type of cars, as we suffer from a problem in the oil bill and the problem of environmental pollution in addition to the high Products and goods are costly due to taxes.

He indicated in exclusive statements to “Jordan News” that this decision will increase the misfortunes of traders and increase costs for consumers, and thus will increase the suffering of our national economy, and the reason for this is government policies that contributed to the downturn of the economy and became unable to reach reasonable percentages in its indicators.

Al-Bashir believes that the decision is without value or financial benefit due to the collection of the treasury in return for the amount of damage and the increase that the merchant or the consumer will bear, and the interest will be very modest compared to the losses of the decline of clearance or the reluctance of this type of car.

The global rise is hitting the new car market

Car dealer Jihad Abu Nasser said in a statement to “Jordan News” that the car market is witnessing a global rise in all types of cars, noting that in Jordan we have witnessed this year a 10% increase in car prices over the previous year.

And he indicated that the scheduled hike early next year on hybrid cars will contribute to a further rise in this type of cars, with high numbers, in addition to the stagnation that will happen on this type of cars and the move to other alternatives.

He pointed out that the electric car market, which was active in the past years and then declined due to the 25% tax imposed on it by the government and then retracted thanks to the incentive packages announced by the government at the end of 2019, has returned to activity again.

He indicated that the volume of clearance on electric cars this year reached 5,000 cars, at a rate of 400 cars per month, while expectations indicate that this number will double from 800-1000 cars per month next year due to the reluctance to use hybrid cars, whose prices are expected to rise due to the special tax imposed on them.

He explained that the gasoline car market, which constitutes the largest percentage of customs clearance in the automotive sector, as the number of cars cleared on them reaches 2,000 cars per month, will witness a demand as well, but towards used cars coming from the Arab Gulf countries because of their cheap prices on the one hand and the size of their small engines that contribute to the provision of fuel. .

Losses for traders and a decline in treasury revenues

For his part, the representative of the automotive sector, heavy machinery and their accessories at the Jordan Chamber of Commerce, Salama Al-Jabali, called on the government not to raise the special tax on hybrid vehicles by 10 percent, which is scheduled to be implemented as of the beginning of next year.

Al-Jabali said that raising the special tax on hybrid vehicles will increase the price of one vehicle by approximately 1500-3000 dinars, and will reduce the demand of citizens to buy this type of vehicle, and the public treasury revenues from this sector will decline.

He explained that the demand for hybrid vehicles at the present time is witnessing a good demand, stressing that the increase in the special tax rates on them will enter the sector into a recession, and will bear the merchants multiple losses, in addition to what the vehicle sector in the Kingdom has endured as a result of the Corona pandemic.