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MPs call on gov't to revamp tax system, address poverty

House enters third day of sessions on budget

By JT - Jan 14,2020 - Last updated at Jan 14,2020

AMMAN — The Lower House on Tuesday continued its deliberations over the 2020 state budget draft law and the budgets of independent public institutions, with most MPs highlighting the importance of lowering taxes and calling on the government not to neglect the condition of citizens.

Lawmakers blamed the government for holding society back from moving towards greater productivity, increasing investments in national resources and reversing the brain drain effect, the Jordan News Agency, Petra, reported.

A number of MPs called for restructuring the tax system, which depends primarily on sales tax, through restoring balance to tax rates among various economic sectors and addressing tax evasion.

Still other MPs said that the failure of successive governments to come up with a comprehensive national plan to deal with the challenges of general debt, poverty and unemployment would contribute to generating a series of crises.  

Some lawmakers asked the government to provide “a real number” concerning the poverty line in Jordan, especially as World Bank experts have noted that one-third of the Kingdom's population lives below the poverty line, Petra reported.

MPs also called on the government to help stumbling farmers by increasing support to the agricultural sector and reducing interest rates for farmers.

Deputies stressed that economic growth requires stability, especially after years of recession that have resulted in growth rates of around 2 per cent, an unemployment rate of 19 per cent and a general debt that nearly totals 100 per cent of the Kingdom's GDP.  

In December, the government presented the 2020 draft state budget law to the Lower House, with an estimated deficit of JD1.247 billion following foreign grants.

Reading a detailed report before lawmakers, Finance Minister Mohamad Al-Ississ said that current expenditures are expected to reach JD8.383 billion, an increase of JD414 million from 2019.

He noted that 65 per cent of the current expenditures will go towards salaries for serving and retired civil and military employees.

Al-Ississ added that the value of capital spending in 2020 is estimated at JD1.425 billion, registering an "unprecedented" increase of 33 per cent.

The 2020 draft state budget law saw a rise in domestic revenues to reach JD7.754 billion, registering an increase of 10.4 per cent from the JD7.021 billion reestimated in 2019, he said.

Foreign grants are expected to reach JD807 million in 2020, the same as the reestimated value in 2019, the minister said.

Al-Ississ explained that the deficit in the 2020 budget is estimated to reach JD1.247 billion after grants, up from JD1.215 billion in the reestimated value for 2019.

Before grants, 2020's deficit was estimated in the law at JD2.054 billion, or 6.4 per cent of the GDP, compared with JD2.018 billion of the reestimated 2019 deficit, constituting 6.5 per cent of the GDP.

According to the draft law, tax revenues are expected to increase by JD853 million to JD5.651 billion compared with JD4.798 billion reestimated for 2019, while non-tax revenues are expected to see a 5.4 per cent drop to JD2.103 billion in 2020, down from the JD2.223 billion reestimated for 2019.

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