Amman, Sept 14 (Petra) – A government source said the cabinet has reaffirmed that its June decision subjecting all vehicles – petrol, hybrid and electric – to the 16 per cent general sales tax remains unchanged.

The source explained that cabinet decision No. 4306, issued on June 28, 2025, annulled all previous exemptions under Article 23 of the Sales Tax Law No. 6 of 1994, based on recommendations of the Economic Modernisation and Development Committee.

At its September 8 session, however, the cabinet resolved to exempt electric and hybrid vehicles that had already cleared customs before the June 28 decision, in order to rectify inconsistencies and ensure fairness. The measure affects only 800 to 900 vehicles, the source added.

Until the June amendments, electric and hybrid cars were subject solely to a high special tax, unlike petrol vehicles which carried both sales and special taxes. The introduction of sales tax created an overlap for a narrow group of cars imported just before the change, prompting the cabinet exemption.

The source stressed that the decision is aimed at ensuring equity and serving the public interest, while noting that the overall tax framework has not been altered.

On June 28, the cabinet, chaired by Prime Minister Jaafar Hassan, approved amendments to the vehicle special tax bylaw, which reduced the overall burden of taxes and customs duties. The reform lowered the combined rate on petrol cars from 71 to 51 per cent, a 28 per cent cut; on hybrids from 60 to 39 per cent, a 35 per cent cut; and fixed the special tax on electric cars at 27 per cent across all categories, replacing a previous structure that would have gradually increased the rate to 55 per cent.

//Petra// AA