Jordanians top for tax-dodging, at "JD800 million"?

Published June 28th, 2012 - 01:06 GMT
Jordanian dinars - a dime a dozen - for Jordanian citizens
Jordanian dinars - a dime a dozen - for Jordanian citizens

Finance Minister Suleiman Hafez estimated tax evasion in Jordan at JD800 million.

“There should be an end to this dodging,” the minister stressed during a meeting with members of the Socio-Economic Council.

Emphasising the importance of studying this phenomenon, he said that activating and applying the law should not be limited only to following up on corruption cases but also to apprehending those who tamper with our basic resources such as water, electricity and telecommunications.

“They seize what is not their right and do not pay their due bills,” he added, stressing that the government has started to take the necessary measures in this regard.

The minister described the current income tax law as "unacceptable" and should be progressive in line with the Constitution.

Hafez predicted that the public debt will exceed 65 per cent of gross domestic product by the end of this year.

He said that would be a JD2,200 financial burden for each citizen.

The finance chief indicated that the Kingdom’s budget was reassuring until 2006 accompanied by real economic growth rates that exceeded 6 per cent until 2009.

He said that when local and external revenues were slightly rising there was an unexpected sharp jumps in government expenditure and that widened the budget deficit and increased indebtedness.

Hafez told council members that things began to deteriorate in 2010 when oil prices went up and gas supplies from Egypt were interrupted.

The minister revealed that Jordan has only received JD18 million in foreign assistance out of the JD850 million that were forecast to support the budget.

He defended the government's recent decisions to raise prices, noting that they will only generate JD300 million until the end of this year.

“The government has started with rationing expenditure, reducing current spending by 15 per cent and halting capital projects that were allocated in the budget but has not started yet,” he said.

"We even stopped new appointments, curbed usage of government cars and travel per diems… we also started using lightening devices that save energy," the minister added.

"Our decisions were meant to achieve social justice and support growth, which if left neglected, would lead to drawbacks in the overall revenues," Hafez indicated.

Emphasising that the measures are not substitute for a national comprehensive reform programme, Hafez underlined the need to address main issues facing the national economy, such as the trade balance, budget deficit, indebtedness and unemployment.

"The government will revisit some basic laws that stimulate the economy, starting with the investment law, which will be referred to the Parlimanet during the extraordinary session, slated to be held soon," the minister said.

However, Hafez noted that some "positive indicators have started to loom in the horizon", such as the increase in tourism revenues by 8 per cent compared with last year, the rise in expatriate remittances and the real estate movement. Responding to members of the council, the minister assured them that the 15 per cent cut in the government's spending will not affect the financial allocations for the National Aid Fund.

He concluded by asking the council members to submit their views and suggestions on all matters that are under consideration by the government.

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