Jordan on the Road to Electronic Invoicing with JoFotara
As of September 25, 2024, Jordan is preparing for the electronic invoicing mandate using JoFotara, the national invoicing system. The Income and Sales Tax Department (ISTD), in collaboration with the Ministry of Digital Economy and Entrepreneurship (MDEE), has initiated and is overseeing this project.
Objectives of the JoFotara System
The primary aim of the JoFotara system is to establish a national electronic invoicing solution that enhances transparency in sales and purchase transactions while enabling the tax authority to gather vital information efficiently. The government is committed to making this system user-friendly to promote widespread adoption among various stakeholders.
To ensure compliance, the ISTD has set a registration deadline of May 2024 for all companies operating in Jordan. Failure to register by this date may result in penalties, particularly as B2G transactions will be restricted to entities registered in the national system. Moreover, private companies should verify that their business partners follow this mandate.
How the JoFotara Portal Operates
The JoFotara system enables users to send electronic invoices to a centralized national platform, streamlining the management of sales and purchase data. After submitting an invoice via the portal, the ISTD produces a QR code that must be included in the final invoice. This QR code acts as a verification mechanism, confirming that invoices have been declared prior to processing payments.
While electronic invoicing is not yet mandatory, the Jordanian government actively encourages companies to adopt this system to mitigate potential fraudulent practices.
Digitalization Challenges in Jordan
Jordan has required issuing invoices for the sale of goods since July 2019; however, the absence of a unified invoicing system has complicated accountability and data exchange among businesses. The ISTD is determined to address these challenges by mandating electronic invoicing for taxpayers required to issue invoices and report them to the tax authority.
Currently, Jordan does not have an established electronic invoicing system. The MDEE has initiated the implementation process by publishing the characteristics and requirements for a national electronic invoicing system in a Request for Proposal document. Key aspects include user types, interface design, invoice management processes, and digital signature solutions.
The new system aims to ensure:
- Control and prevention of fiscal fraud and tax evasion
- Cost efficiency related to paper usage
- Accessibility through various interfaces, including smartphones and an online platform
- Ease of implementation to encourage broader adoption by companies and taxpayers
- A user-friendly experience across different platforms
A Call for Improvement
According to the “Electronic Government Development Index” reported by the Jordanian Strategic Forum, Jordan currently ranks low compared to other UN member states. This index evaluates the reach and quality of online services, telecommunications connectivity, and human capital.
The JSF has recommended enhancing security measures for electronic data interchange and the platforms facilitating these transactions. This year, the government is expected to release an implementation timeline and outline the technical requirements for taxpayers to ensure compliance.
As Jordan navigates this transition to electronic invoicing, the JoFotara system is a crucial step toward modernizing its tax landscape and improving business processes nationwide.
There’s more you should know about global e-invoicing changes – learn more about the new and upcoming regulations.
