Lawmakers, officials discuss alternatives to ‘tax hikes’

AMMAN — A Lower House committee formed to follow up on the House's recommendations related to the 2017 draft laws on the state budget and the budgets of independent government units has advised against levying additional taxes on citizens to increase revenues.

The committee stressed that more taxes on basic commodities are likely to affecting living standards, calling on the government to adopt alternative policies and financial reforms, the Jordan News Agency, Petra, reported Tuesday.

The recommendations that were provided by the House would contribute to increasing revenues and reducing the budget's deficit without affecting low- and medium-income citizens, said the committee.

The remarks came during the committee's meeting on Monday, chaired by MP Nassar Qaisi and attended by its rapporteur Raed Khazaaleh, Minister of Finance Omar Malhas, Minister of Industry, Trade and Supply Yarub Qudah, Minister of Labour Ali Ghezawi, Minister of ICT and Public Sector Development Majd Shweikeh, and Minister of Political and Parliamentary Affairs and Minister of State Musa Maaytah, along with directors of the Income and Sales Tax Department (ISTD) Bashar Saber and Jordan Customs Department (JCD) Maj. Gen. Wadah Hmoud.

During the meeting, the officials briefed the committee on the government's measures to implement the House’s 26 recommendations and their expected financial impact, noting that some of the suggestions were already adopted while others were still under study. 

Qudah said the government has not scrapped the exemptions off basic commodities, noting that 80 per cent of these items will not be affected.

As for reducing public expenditure, the ministers underlined a recent Cabinet decision to deduct 10 per cent of any sum of public sector salaries that is above JD2,000, including the prime, minister’s, trim travel allocations and halt furniture and vehicle purchases, in addition to limiting financial benefits of government officials appointed to the boards of companies owned fully or partially by the government. 

Regarding tax reforms, Malhas said it would not be possible to achieve this goal in light of huge tax exemptions and exceptions that have become the rule. 

Official figures estimate tax exemptions at JD3 billion a year.

He outlined the potential revenues if the Lower House’s recommendations are applied.

Ghezawi said the recent decision to unify fees on foreign labour work permits (at JD500) came as a corrective measure to prevent labourers from illegally moving from one sector to another, adding that the parting of the revenues will be allocated to support vocational training and farmers.

For her part, Shweikeh outlined her ministry’s actions in response to the parliamentary proposals, while Maaytah said that some of these recommendations need time to be implemented.