Jordan: Lower customs duties on vehicles expected to stimulate automotive sector, boost economy

Zawya

30-06-2025

AMMAN — In a bid to ease vehicle ownership and stimulate economic growth, the government has announced wide reductions in customs duties on imported vehicles, including petrol, hybrid and electric cars.
The Cabinet's decision, unveiled on Saturday, announced major tax cuts on vehicles, reducing customs duties on petrol cars from 71 per cent to 51 per cent, setting a unified 27 per cent rate for all EVs, and cutting hybrid vehicle taxes from 60 per cent to 39 per cent.
Officials and analysts say the move aims to boost consumer purchasing power, stimulate activity in the automotive sector, and align with international shifts towards greener transport solutions.
'This is a significant step that benefits both citizens and the broader economy,' said Sakher Ajlouni, Chairman of the Jordan Free and Development Zones Group, in a statement to The Jordan Times. 'Lowering customs and tax burdens will make vehicles more affordable and stimulate automotive trade. The ripple effects will extend to related sectors such as maintenance, insurance and spare parts.'
According to data from the Free Zones Corporation, 32,908 vehicles were cleared for the local market from the Zarqa Free Zone, the Kingdom's main hub for vehicle imports, as of June 28, 2025. Electric vehicles comprised 63 per cent of the total, followed by hybrids at 21 per cent, and petrol vehicles at 16 per cent.
The figures reflect a growing public shift towards sustainable mobility, a trend expected to accelerate further under the new, harmonised customs framework, according to officials.
Director-General of the Free Zones Corporation Abdulhamid Gharaibeh said that the reform goes beyond cost reduction. 'This is about fostering a more competitive, balanced market,' he noted. 'Instead of transferring the financial burden to consumers or businesses, the government is adjusting its own revenue share to create room for market growth.'
He stressed that these decisions are expected to significantly increase the flow of vehicles from free zones to the local market. 'The reforms aim to enable citizens to purchase all types of vehicles, whether petrol, hybrid, or electric, at lower prices than before, regardless of their country of origin. The key regulatory benchmark is now the safety standards of vehicles entering the local market, to ensure public safety,' Gharaibeh said.
He added that the move would also empower traders to expand their inventories and increase sales, as the reduction in vehicle prices stems from the treasury's portion of the customs and tax revenues. 'This will drive both supply and demand across all vehicle categories and fuel types,' he noted.
Financial analyst Yousef Suboh told The Jordan Times that the reduced rates could spark a rise in market transactions, ultimately increasing customs revenues despite the lower duty rates. 'This decision strikes a balance between fiscal responsibility and citizen support, especially in light of international economic headwinds,' he said.
As the new tariff structure comes into force, stakeholders are hopeful the initiative would lower car prices, encourage eco-friendly vehicle adoption and act as a springboard for broader economic recovery.
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