Consumer society, traders syndicate say gov’t should lower taxes on food, not luxury items

AMMAN — A consumer advocate and the syndicate representing food traders on Sunday expressed “surprise” at a recent government decision that lowered the sales tax on a number of imported “luxury items”.

Last week, the government lowered sales tax from 16 to 8 per cent on clothes, bags, watches, shoes, perfume, jewellery, toys and cosmetics. Customs duties were also reduced on these items. 

Khalil Haj Tawfiq, president of the General Association for Foodstuff Merchants, said in remarks to The Jordan Times the government should have lowered taxes on essential commodities rather than luxury items, indicating that the government had rejected a proposal to remove the 1 per cent customs service fees on food items such as rice, sugar and vegetable oil that are exempted from taxes. 

“I’m really shocked that the government reduced taxes on luxury items. It seems that making food prices affordable to consumers is not a priority for the authorities,” he said. 

Haj Tawfiq noted that the government has also rejected a request by importers and the association to lower the 16 per cent sales tax on nuts and coffee to combat smuggling, adding that the value of smuggled quantities of these products are estimated at JD80 million so far this year.  

He said that imported frozen poultry is subject to 25 per cent customs duties and 4 per cent tax. 

Also on Sunday, Consumer Protection Society (CPS) President Mohammad Obeidat said he was also “shocked” by the government move to lower taxes on luxury items, noting that the decision should have covered basic commodities. 

In a statement e-mailed to The Jordan Times, the CPS president said the government decision was not studied properly as it would not serve the interests of consumers “as importers and traders of these items will not lower their prices”. 

Obeidat said the decision also deprives the Treasury, “which suffers from a financial deficit and widening debt levels”, of millions of dinars in revenues. 

Industrialists have also expressed concerns over the government move by saying it would harm local industries. 

A government official, who preferred to remain unnamed, said the decision is aimed at stimulating demand in the domestic market, adding that the majority of food items are already exempted from taxes and customs duties.