Jordan, a country located in the heart of the Middle East, is an important regional hub for trade, particularly due to its strategic geographical location and historical trade routes. With limited natural resources, Jordan relies heavily on imports to support its domestic economy and industries. The country has established a relatively open trade policy that allows for a wide range of imports, including consumer goods, industrial machinery, and raw materials. The Jordanian government has also sought to diversify its economy and reduce reliance on imports by fostering local industries, although this remains a challenge due to the country’s small size, arid climate, and reliance on foreign energy supplies.
Jordan’s customs and tariff system is structured to regulate the flow of goods into the country while simultaneously promoting local industries, protecting domestic producers, and generating revenue for the government. Import tariffs are levied on goods based on their classification under the Harmonized System (HS) code, a globally accepted method for classifying traded products. In addition to customs duties, various taxes, including General Sales Tax (GST) and Excise Tax, apply to imports. Moreover, Jordan has established preferential trade agreements with several countries, which can lead to reduced tariffs or exemptions for certain goods.
Overview of Jordan’s Tariff System
Jordan operates its tariff system in accordance with World Trade Organization (WTO) rules, as it is a member of the organization. In addition, Jordan is also part of several free trade agreements (FTAs) with countries and regional groups, including the Arab Free Trade Area (AFTA), the Greater Arab Free Trade Area (GAFTA), and a bilateral agreement with the United States. These agreements have allowed Jordan to lower or eliminate import duties on certain products from member countries.
Jordan’s import tariffs consist primarily of ad valorem duties (a percentage of the product’s value) and specific duties (a fixed amount per unit). The import duties levied on products are governed by the Customs Department of Jordan, which implements regulations regarding tariffs, taxes, and customs procedures. Goods that are imported into Jordan are subject to the following main taxes:
- Customs Duties: This is the primary duty imposed on imports based on their classification under the Harmonized System (HS) codes.
- General Sales Tax (GST): A value-added tax (VAT) of 16% is applied to most goods and services imported into Jordan.
- Excise Tax: Certain products such as alcohol, tobacco, and sugary beverages are subject to additional excise taxes.
- Other fees: The Customs Department may impose additional fees or charges for services related to customs clearance or special handling.
The country’s import tariffs are structured in a way that balances the need for government revenue with the desire to promote economic growth, encourage investments, and protect local industries.
Categories of Products and Applicable Tariffs
The tariffs for imported products in Jordan are categorized based on the HS code, which classifies goods into different categories according to their nature. Here are some common product categories and their associated tariffs.
Agricultural Products
Agricultural products imported into Jordan are generally subject to moderate to high tariffs, as the country has a significant agricultural sector that the government seeks to protect.
- Fresh Fruits and Vegetables: These products are vital for both consumption and trade, with tariffs ranging from 0% to 25% depending on the product. Some fruits and vegetables are exempt from import duties due to seasonal variations in local production.
- Meat and Poultry: Import duties for meat products can range from 10% to 25%, depending on whether the meat is fresh, frozen, or processed. Poultry products, such as chicken, can be subject to tariffs in the range of 15% to 30%.
- Dairy Products: Dairy products, including milk, cheese, and butter, often carry duties ranging from 10% to 30%, depending on the product type. The government protects local dairy production by imposing higher tariffs on many dairy imports.
- Cereals and Grains: Grains such as wheat, rice, and corn face tariffs from 5% to 15%, although certain grains may benefit from lower tariffs under trade agreements with other Arab countries.
- Sugar: Sugar is a highly regulated product in Jordan, with import duties typically ranging from 5% to 25%, depending on the product and market conditions.
- Alcoholic Beverages: Alcoholic drinks such as wine, spirits, and beer are taxed heavily in Jordan, with import duties ranging from 50% to 100%, depending on the product and alcohol content.
Consumer Goods
Consumer goods include a wide variety of items, from electronics to clothing. These goods are commonly imported and are subject to moderate import tariffs.
- Clothing and Textiles: Apparel, textiles, and fashion items generally carry tariffs ranging from 10% to 30%, depending on the type of fabric and the country of origin. Goods imported from Arab League countries may qualify for reduced tariffs under the Arab Free Trade Area (AFTA).
- Footwear: Import duties for shoes, sandals, and other types of footwear typically range from 10% to 25%, with leather footwear generally facing higher duties.
- Electronics: Electronics, including smartphones, computers, televisions, and other consumer electronics, are subject to 0% to 10% import duties. There are specific exemptions or lower tariffs for some electronic items that fall under IT Agreements (such as computers and parts).
- Household Appliances: Appliances such as refrigerators, washing machines, and air conditioners generally face import duties of 10% to 20%, although some energy-efficient appliances may qualify for lower duties.
- Furniture: Furniture imports typically carry tariffs of 10% to 20%, depending on material, quality, and whether the item qualifies under a preferential trade agreement.
Industrial Products
Jordan’s industrial sector imports raw materials and finished products that support its manufacturing processes. These imports generally face lower tariffs to encourage industrial development.
- Steel and Iron: Steel products typically attract import duties ranging from 0% to 10% depending on the type and intended use of the material. Certain types of steel used for construction purposes may be exempt from duties.
- Chemicals: Chemicals used in manufacturing, pharmaceuticals, and agriculture face import duties ranging from 0% to 15%. Special categories, such as pharmaceutical chemicals, may be subject to reduced or zero duties to ensure access to essential products.
- Plastic Materials: Plastics used in manufacturing often face import duties of 0% to 10%, with higher duties for more specialized plastics.
- Industrial Machinery: Import duties on industrial machinery, including equipment for manufacturing, construction, and mining, generally range from 0% to 10%. Certain machinery necessary for investment projects may be eligible for duty exemptions.
- Raw Materials for Electronics: Electronics manufacturing in Jordan relies on the importation of raw materials such as semiconductors, circuit boards, and other components. Import duties on these products are typically low, ranging from 0% to 5%.
Vehicles and Automotive Parts
Jordan is a large market for automotive products, and vehicles are among the top imported goods. The country imposes significant tariffs on automotive imports, especially on new vehicles.
- Passenger Vehicles: Import duties for passenger cars typically range from 30% to 50%, depending on the engine size, model, and age of the vehicle. Newer vehicles with lower emissions may benefit from reduced duties.
- Commercial Vehicles: Commercial vehicles such as trucks, buses, and construction vehicles are subject to duties ranging from 20% to 35%, with exemptions for vehicles used for specific industries (e.g., agriculture or transportation).
- Automotive Parts and Accessories: Import duties for automotive parts and accessories typically range from 10% to 25%, depending on the part’s nature and whether it is used in the assembly of locally manufactured vehicles.
Special Import Duties for Certain Countries
Jordan’s import tariff system includes provisions for preferential tariffs for goods originating from certain countries and regions. These preferences come from trade agreements that Jordan has signed with various nations and regional groups.
- Greater Arab Free Trade Area (GAFTA): As a member of GAFTA, Jordan has signed agreements with other Arab countries to reduce or eliminate tariffs on goods traded within the Arab world. This applies to a wide range of products, including agricultural goods, textiles, and industrial products.
- United States: Through the Jordan-US Free Trade Agreement (FTA), goods imported from the United States enjoy preferential treatment, with many U.S. products being exempt from tariffs or subject to lower rates. This includes industrial products, electronics, machinery, and chemicals.
- European Union: Jordan has a European Union (EU)-Jordan Association Agreement, which provides preferential tariffs on many goods imported from EU countries. Certain agricultural and industrial products benefit from reduced tariffs under this agreement.
Other Duties and Taxes
In addition to customs duties, several taxes are levied on goods imported into Jordan:
- General Sales Tax (GST): The standard 16% GST is applied to most imported goods, with some exemptions for essential products such as food and medicine.
- Excise Tax: Excise taxes are imposed on goods that have a significant health or environmental impact, such as alcohol, tobacco, sugary drinks, and certain luxury goods. The excise tax rate varies depending on the product.
- Environmental Tax: Certain products that negatively impact the environment, such as non-recyclable plastics or harmful chemicals, may be subject to an environmental tax or additional levy.
Country Facts
- Official Name: Hashemite Kingdom of Jordan
- Capital: Amman
- Population: Approximately 11 million (2023)
- Per Capita Income: Approximately $4,500 (2023)
- Official Language: Arabic
- Currency: Jordanian Dinar (JOD)
- Location: Located in the Middle East, bordered by Iraq to the east, Saudi Arabia to the southeast, Israel and Palestine to the west, and Syria to the north.
Geography
- Jordan is a landlocked country situated in the Levant region of the Middle East. It has a diverse geography that includes the Jordan Valley (part of the Great Rift Valley), the Dead Sea (the lowest point on earth), and mountainous areas in the north and south.
- The desert region in the east, known as the Eastern Desert or Badia, comprises a large portion of the country’s land area, while the west is more fertile, with agriculture concentrated around the Jordan River and the Dead Sea.
Economy
- Jordan has a relatively small economy that is heavily reliant on services, particularly finance, tourism, and healthcare. It has limited natural resources, which contributes to its dependence on imports for energy and other raw materials.
- The economy faces challenges such as high unemployment rates, especially among youth, and the burden of hosting a large number of refugees from neighboring conflicts.
Major Industries
- Mining and Phosphate: Jordan is a major exporter of phosphate and potash, which are essential for the fertilizer industry.
- Tourism: The country’s rich history and cultural sites, including Petra and the Dead Sea, make tourism an important industry.
- Manufacturing: Jordan has a growing manufacturing sector, with key industries in pharmaceuticals, chemicals, textiles, and food processing.
- Financial Services: Amman is a regional financial hub, with a growing banking and insurance sector.
