New trends in economic policies: an analysis of recent cabinet decisions

The recent cabinet meeting brought several important economic decisions, marking a significant change in how the government handles economic issues. These decisions included lowering the required deposits for foreign residents, paying tax refunds, and creating a legal framework for virtual assets. These steps reflect a practical approach to supporting the economic modernisation vision by encouraging investment, improving cash flow, and regulating emerging financial markets.

The first decision aims to make Jordan more attractive for foreign investors by lowering the required deposit for residency renewal. Reducing the deposit to 10,000 dinars instead of 20,000 dinars makes it easier for foreign investors to settle, which will boost local spending and stimulate various markets. The requirement for a two-year stay before benefiting from this reduction ensures that serious investors seeking stability are attracted, rather than short-term speculators. Compared to other neighboring countries, this decision could make Jordan a more appealing destination for investors and residents, ultimately strengthening the economy.

The second decision is about paying tax refunds, which will help improve cash flow and stimulate the economy. Paying these refunds to individuals and businesses increases purchasing power and raises demand for goods and services. This also eases financial burdens on businesses, allowing them to invest, pay wages, and finance new projects. By returning funds that were previously held by the government, more money becomes available for spending or investment, which boosts economic activity. Individuals often spend part of their refunds on personal consumption, which increases business sales and encourages companies to produce more and hire more workers. For businesses, improved cash flow helps them settle debts, expand operations, or invest in new projects.

Additionally, completing the invoicing and digitization system will help reduce tax evasion and create a fairer tax system. This will build trust among citizens and businesses in the government’s financial policies. Spending 26 million dinars to pay off income tax refunds from 2020 to 2022 and 50 per cent of 2023 refunds puts more money into the market, helping to kickstart the economy, especially in areas where growth has slowed.

The third decision involves creating a legal framework for virtual assets, which is an important step in regulating this fast-growing sector. A clear law governing virtual assets gives investors more confidence and attracts new investments to the local economy. The law will also ensure proper monitoring of digital asset trading, reducing the risks of speculative trading and price fluctuations, and protecting the economy from fraud and money laundering. By licensing activities related to virtual assets, new opportunities may arise for entrepreneurs and startups to take advantage of new technologies in the financial sector. The law also creates clear rules that prevent confusion in the digital asset market while allowing innovation in financial technologies.

Having a legal framework also helps in cooperating with other countries' regulatory bodies to fight cross-border financial crimes and share information. It will set clear rules on which activities are allowed and which are prohibited, with strong penalties for those who break the law. This helps protect participants and reduce fraud. This law sets up a safe and sustainable financial environment that keeps up with global trends and protects the national economy from risks, while also encouraging growth and innovation in the global virtual asset market.

These decisions show a clear direction to achieve long-term economic growth by making it easier for foreigners to invest and live in Jordan, improving cash flow through tax refunds, and regulating emerging financial markets. These policies will help reach the goals of economic modernization by building investor confidence, supporting the private sector, and creating a more stable and attractive financial environment. However, the success of these measures will depend on how well they are implemented, how the market responds, and how well they adapt to global economic changes.

Raad Mahmoud Al Tal head of the Economics Department, University of Jordan- r.tal@ju.edu.jo