AMMAN, Jordan — Jordanian Prime Minister Omar Razzaz announced Thursday that a deal has been reached to withdraw a proposed income tax law that has sparked a week of angry protests.
“An agreement has been found to withdraw the bill,” Razzaz told journalists after meeting legislators, without setting a firm date for parliament to send the legislation back to the government.
Demonstrations have rocked the capital Amman and several other cities for more than a week since the government adopted a draft income tax law aimed at increasing taxes on employees by at least five percent and on companies by between 20 and 40 percent and announced new price hikes based on recommendations from the International Monetary Fund.
Last week it announced a new price hike for electricity and fuel, before revoking it under orders from the king following protests.
The protests continued despite the resignation on Monday of former prime minister Hani Mulki, with critics saying his government’s austerity measures would mostly target the poor and the middle class.
The draft tax law and price hikes were the latest in a series of economic reforms undertaken since Amman secured a $723 million three-year credit line from the IMF in 2016.
The loan, intended to support economic and financial reforms, has the long-term objective of reducing Jordan’s public debt from about 94 percent of GDP to 77 percent by 2021.
The kingdom has experienced an economic downturn in part because of prolonged conflict in neighboring Syria and Iraq, and a large influx of refugees several years ago. The official unemployment rate has risen above 18 percent, and it’s believed to be double that among young Jordanians, while the prices of essential goods such as bread have gone up.
Western allies of the kingdom view any signs of social unrest with concern. Jordan is seen as an island of relative stability in a turbulent region and plays a key role in the international fight against Islamists.
Jordan’s king has the final say in all policy matters, but positions himself as being above the political fray. He frequently reshuffles or disbands governments as a way of defusing public anger.