Jordan's House of Representatives have passed an Income Tax Bill that among other things stipulates that the tax rate for insurance and reinsurance companies will be maintained at 24%.
Prior to this, the proposed income tax law prepared by the previous government aimed to raise the tax rate on insurance companies from 24% to 40% as it attempted to increase tax collections to boost the finances of a debt-burdened economy hit by regional conflict. However, a new government took office in June.
The Jordan Insurance Federation (JOIF) had called for dialogue on this and other issues affecting the industry. The association pointed that the Jordanian insurance sector, comprising 24 insurers, achieved a net profit after tax of only JOD3.9m ($5.5m) in 2017 compared to JOD26.7m in 2016, a plunge of 85.3%. Despite the losses accumulated by insurers in compulsory lines, and the government's insistence on not raising premium rates in these lines, insurance companies were still continuing to offer coverage in the national interest, it said.