A new income tax law went into effect in 2002 that reduced the top income tax rate to 25% from 30%. The new law also equalized the level of tax exempt income for men and women, at JD 1,000 (about $1,418) for both sexes. Income tax rates range from 5% to 25%, with the average tax payer paying a marginal rate of 5%. Corporations are taxed at a rate of 15% (35% for those involved in banking and finance). In January 2001 Jordan entered the second phase of its transformation to a value-added tax (VAT) regime, a reform begun in 1996. The VAT rate is 13%, and in 2001 about 25 new commodities were added to its coverage, including some food products, tobacco, coffee, soft drinks, new cars, heavy-duty vehicles and paper products. Businesses with sales less than JD 250,000 (about $355,000) a year are exempt from registering for the VAT. There are no capital gains or net worth taxes on individuals, and social security taxes are paid jointly by employers and employees.