World News

Jordan Withdraws Tax Bill That Fueled Nationwide Protests

Posted June 7, 2018 11:43 a.m. EDT

AMMAN, Jordan — The government of Jordan announced Thursday that it would withdraw a divisive tax bill after nationwide protests rocked the country, leading to the resignation of the prime minister and his Cabinet.

The newly appointed prime minister, Omar Razzaz, said in a statement that he had consulted members of both houses of parliament, and that there was a consensus that the tax bill should be withdrawn.

“This is a law that impacts all Jordanians,” Razzaz said. “It will be withdrawn and re-examined through national dialogue.”

The tax proposal was the latest in a series of measures that Jordan took after securing a $723 million, three-year line of credit from the International Monetary Fund in 2016. The changes aimed to lower the country’s public debt, which totals $35 billion, to advance economic overhauls and to enhance growth.

The decision to withdraw the bill, which proposed increasing the tax rate on workers by at least 5 percentage points and on businesses by 20 to 40 percentage points, was lauded by many in Jordan, where the official unemployment rate is 18 percent and poverty rates are even higher. Inflation rates grew 50 percent from 2006 to 2017, yet incomes are hardly budging.

Jordan, an important U.S. ally in the region, is largely deprived of natural resources. It has depended on regular foreign aid, and its economic pressures have been compounded by a huge influx of refugees, including hundreds of thousands from war-torn Syria.

Last week, thousands of Jordanians began taking to the streets, in the largest protests in the country since the Arab Spring in 2011. They have drawn diverse crowds, including engineers, doctors, taxi drivers, university students and unemployed young people, and they spread nationwide when more than 30 labor unions staged the largest strike in years.

Even after the prime minister resigned Monday, demonstrators kept up the pressure, protesting daily, calling for the tax law to be withdrawn and for an end to what they perceive as endemic corruption and a lack of accountability.

Maintaining stability in Jordan is a top U.S. priority in the region. In 2015, the Obama administration and Jordan signed a three-year agreement in which the United States pledged $1 billion in assistance annually, subject to the approval of Congress. More recently, Washington pledged $6.3 billion in aid through 2022, making Jordan one of the top recipients of U.S. foreign assistance.

Razzaz, who is expected to announce his Cabinet in the coming days, said on Twitter on Wednesday that he wanted more dialogue with all stakeholders in order to agree on a comprehensive economic plan and to regain the trust of the people.