Gov't tax reductions on commodities had 'little to no effect' on real prices

AMMAN — The results of a recent study by the National Society for Consumer Protection revealed that tax reductions imposed on the prices of a number of commodities by the government a few weeks ago have had “little to no effect” on their actual prices, prompting an investigation by the Ministry of Industry, Trade and Supply.

The comparative study, which tracked changes in the prices of 96 commodities, among which were those included in the government’s recent decision, showed an almost 8.2-per cent increase in the prices of 18 food and home commodities, no change in the prices of 76 commodities and a decrease in the prices of only two commodities.

"It was expected that the prices of all 76 commodities that were included in the reduction decision would decrease, but we were surprised that there was no significant reduction in the prices any of these commodities," President of the society Mohammed Obeidat said in a statement on Wednesday.

The study showed that the prices of vegetables and red meat, in spite of the decision, have increased. The price of live chickens has decreased, while the prices of rice, tea, sugar, legumes, milk, dairy, cheese, vegetable oil and canned foods have remained stable.

The government's decision, which already came into effect, to reduce taxes on 76 commodities, especially dairy products and jameed (dried, salted yoghurt), has “gone unnoticed” by shop owners, the society stated.

In response to the study, Obeidat called on the government to tighten its control on markets and compel merchants who sell these commodities to adjust their prices according to the reduction decision.

A report published by the society also called on the government to hold accountable those who are not abiding by the decision. 

He stressed that the reduction is a “legitimate right of citizens and must be adhered to, especially since the official decision was announced weeks ago”, adding that the implementation of the decision will “stimulate market movement and will ultimately be in the interest of all parties, especially merchants, who will see more sales activity”.

Obeidat pointed out that the harsh weather conditions Jordan is experiencing these days have also contributed to the higher prices of some vegetables that have witnessed a drop in supply due to damage.

In response to the society's study and the subsequent online backlash it caused the Ministry of Industry, Trade, and Supply, Minister Tareq Hammouri said that the ministry will conduct its own comparative study on the matter.

The results of the study are set to be released in the coming weeks.

“The ministry is keen on price stability and on not raising prices for unjustified reasons," Hammouri said in a statement. 

"However, in some cases, price ceilings for certain commodities can only be determined after a series of procedures and dialogue sessions with the concerned authorities from the private sector,” he added.

“The ministry monitors the prices of various basic commodities through field tours on a daily basis, undertaken by control teams in all regions of the Kingdom,” he said.