Local retailers ‘drowning in debt’ — stakeholders

AMMAN — The garment, textile and footwear sector has been suffering due to government-imposed taxes and custom fees, according to a sector representative.

“The government’s tax system is not in the sector’s favour,” Sultan Allan, a representative from the Garment, Textile and Footwear Syndicate, told The Jordan Times.  

The garment, textile and footwear sector is one of the largest consumer goods sectors in the Kingdom. Jordan’s imports in the sector have decreased by JD20 million during 2020 and are expected to further decrease by JD35 million in 2021, according to Allan.

“We demand that the government unifies the taxes and customs imposed on imported apparel,” he continued. 

“Clothing and footwear imported to the Aqaba Special Economic Zone Authority (ASEZA) are not subjected to any taxes or custom fees. If the same garment was to be imported to anywhere else in the Kingdom, it would be subjected to fees of 47 per cent for clothing and 57 per cent for footwear,” Allan said.

As for online shopping, shipments are not subjected to taxes; however, consumers pay an additional 10 per cent on the overall shipment price as custom fees. 

Due to this, “online shopping is more common now, especially with the younger generation, simply because it’s cheaper than local retail shopping prices,” Allan added. 

“We are suffering from a significant rise in shipping costs, in addition to taxes imposed by the government to the point where we are not even breaking-even,” Ahmad Seelawi, a local clothing shop owner, told The Jordan Times. 

Seelawi noted that many shops were forced to close due to the increasing expenses and low demand. 

“Online shopping is thriving whereas local retailers are drowning in debt,” Tamara Asfour, a clothing shop owner, told The Jordan Times.

Asfour added that the consumers shift towards online shopping has motivated local retailers to attract consumers with sales and discounts.

“Amid COVID-19, consumers are not feeling comfortable touching and fitting clothes in retail stores, because they are anxious about who would have touched the clothes before. Customers are worried about catching the virus in crowded shopping malls and retail stores,” Asfour concluded.