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How to fix the budget

Aug 06,2019 - Last updated at Aug 06,2019

Deputy Prime Minister and Minister of State Rajai Muasher disclosed on Monday that the state budget faces a number of challenges, among which are the tax evasion problem and the widespread exemptions from tax or custom duties.

The deputy prime minister was candid about the primary reason or reasons why the government budget continues to encounter problems that prevent it from achieving a balanced budget on a regular basis.

With regard to the tax evasion problem, the government must know by now that, by and large, Jordanians do not have the custom or the culture to fill out tax forms for the internal revenue authority on an annual basis. Peoples living in industrialised or advanced nations have developed the tradition of submitting forms annually, bearing their incomes and lawful deductions on a regular basis.

To remedy this particular problem in Jordan, the government must come up with an ingenious way to collect taxes from individuals that is not dependent on filling out tax forms.

Taxation at the source could be one way to collect taxes on taxable incomes from individuals who do not bother to report on their incomes annually. Employees or functionaries can pay their taxes on their salaries through their employers. Companies must bear the brunt of collecting taxes on the incomes of their employees. Relying on employees who earn little over JD400 or even JD500 per month to voluntarily file annual tax forms is not possible or workable.

Obviously, this problem does not exist with companies which have the obligation by their own bylaws to report on their revenues on a yearly basis.

As for the tax or custom duties exemptions problem, it is within the power of the government to do something about that by ending or limiting this abuse of the laws of the country. It is the government that grants these exemptions on one criterion or another, and must, therefore, bear the consequences of this unfair practice.

Granting custom or tax exemptions to a select group of people smacks of unfair treatment of the people who do pay taxes and custom duties.

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