Local industries decry customs duty cuts

AMMAN — Industrialists continued to protest against a recent government decision they deem "destructive" to national industries by holding a sit-in outside the Industry and Trade Ministry on Sunday.

Last month, the Cabinet decided to lower sales tax and customs duties on several items.

Under the new decision, which was published in the Official Gazette, the sales tax on clothes, bags, watches, perfume, jewellery, toys and cosmetics was reduced from 16 to 8 per cent, while the customs duties on these items were lowered by between 5 and 30 per cent.

Amman Chamber of Industry (ACI) Chairman Ziad Homsi said industrialists and sector leaders alike were "shocked" by the decision.

"We were not consulted. We always hear talk about public-private partnerships, but decisions concerning the sector are presented as fait accompli," Homsi told The Jordan Times.

He noted that the ACI sat last week with the Industry, Trade and Supply Minister Maha Ali, and she promised that the ministry will study the matter and try to reach a compromise that would satisfy all parties involved.

"Still nothing has been done. We believe that lowering the customs duties from 30 to 5 per cent will destroy local industries," the ACI chairman said.

There are 1,010 factories manufacturing clothes and shoes registered in the Jordan Chamber of Industry, and they have 49,445 employees, according to the ACI.

Ali met with representatives of the footwear and bag industry on Sunday and listened to their views on the customs duty cuts, according to a statement from the ministry.

She said the ministry is committed to enhancing the local industrial sector's competitiveness and will study industrialists' demands and possible measures to address the issue.

The Amman Chamber of Commerce (ACC) has praised the government decision, which was made in response to the commercial sector's demands to reduce taxes and fees on items that serve the national economy.

The chamber described the decision as positive considering the Kingdom’s difficult economic circumstances and the decline in commercial activity affecting different sectors, according to a statement sent to The Jordan Times last month. 

The ACC also called on the government to reconsider taxes and fees imposed on many food items, whose prices constantly change to avoid entering the Kingdom illegally, the statement added.

"Such a decision would contribute to curbing tax evasion and supporting social classes with limited income, as decreasing taxes leads to lower prices and more protection for these segments, the chamber said.

Reducing taxes shows the government’s keenness to provide real social security to its citizens, the ACC said.