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An official at the centre of Jordan’s drive to grow its economy has acknowledged the effects of the Gaza war on the kingdom’s tourism sector but has said he expects a quick recovery once the hostilities end.
The war in Gaza saw many flight routes to the kingdom cut, with visitor numbers declining by 10 per cent to 1.3 million in the first quarter of this year, according to data published by the government.
“As soon as the Israeli aggression stops, as soon as matters return to a sort of normal, there will be a recovery, stronger and faster than before,” Nayef Al Fayez, head of the Aqaba Special Economic Zone Authority, told The National this week.
Since Covid-19 subsided in the last two years, Jordan has revived a drive to bring in visitors and foreign investment, particularly to Aqaba on the Red Sea.
Travel agents say this year's decline in visitors has been more acute in western tourists after Ryanair and other low-cost airlines stopped most of their flights from Europe to Amman this year. There is no official breakdown by nationality of visitors.
The cancellations were due to plane shortages and higher flight costs with routes having to avoid Israeli air space. The Jordanian government had also declined to raise a $40 per passenger subsidy it was giving airlines as an incentive to fly to the kingdom.
Tourism plays a significant role in Jordan's economy. Many visit to take part in popular activities such as diving in the Dead Sea, visiting Petra and Greco-Roman ruins, or spending time at the Umayyad castles to see some of the unique art of Islam.
In other sectors, the head of an Aqaba port company said this week that general cargo throughput had fallen 10 per cent since the outbreak of the Gaza war last October.
Mr Al Fayez, a former tourism minister, dismissed the possibility of the war having a lasting effect on Jordan's economy.
He said the kingdom was forging ahead with modernisation plans, such as a strategy to grow the economy on its 27km Red Sea coast, which was unveiled on Wednesday.
He said Jordan could deal with regional competition as Saudi Arabia develops its Neom mega project, 200km south of Aqaba, and Egypt expands its own Red Sea plans.
These projects, “are welcome”, partly because members of Jordan's “skilled and young” workforce have a competitive advantage if the demand develops for regional jobs.
“By being strong [economically], we can stand by our people in Gaza,” Mr Al Fayez said.
Pointing out that Jordan had recovered numerous times from regional shocks, he said Aqaba would be restored “on the investment map”, and tourists would return.
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Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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