Domestic revenues estimates in 2019 state budget law ‘a lot exaggerated’ — JSF

AMMAN — Domestic revenues estimated in the draft 2019 state budget law are "a lot exaggerated" as they exceed the expected 4.8 per cent growth in GDP next year, according to the Jordan Strategy Forum (JSF).

The JSF said that the gap between the tax revenues estimated in the 2018 budget and what was brought in indicates that there is always an exaggeration in revenues. 

The only way to achieve the estimated tax revenues, according to the JSF, is through increasing sales tax on services, a thing that contradicts the government's pledge to reconsider the said tax.

The JSF added that the increase in tax revenues that the government is looking to achieve in 2019 coming from sales tax, where the tax's share constitutes about 55.4 per cent of the total expected increase in these revenues.

The JSF warned against overestimating the revenues of the National Electric Power Company (NEPCO), saying that the increase in NEPCO's revenues in 2019 may not be achieved as it was in 2018. NEPCO’s revenues were estimated at JD159.2 million in 2018 budget, but they did not exceed JD2 million, according to the reestimation numbers.

In this context, the JSF recommended that measures be taken to ensure that such misestimation does not recur in 2019. 

The state budget statement submitted to the Lower House estimated the volume of local revenues in 2019 to reach JD8.010 billion with an increase of 14.8 per cent from 2018, attributing the reason primarily to the rise in tax and non-tax revenues by 15.9 per cent and 12.9 per cent, respectively.

Tax revenues are estimated for the entirety of 2019 at JD5.273 billion, of which income tax revenues would constitute JD3.610 billion, customs revenues JD365 million, property sale tax JD110 million, while non-tax revenues are estimated at JD2.737 billion, according to the statement.

The budget statement estimated foreign grants in 2019 to reach JD6 billion, compared with JD915 billion in 2018, with JD113 million coming from the GCC, JD71 million from pledges made at the Mecca summit and JD416 million from the US and the EU.

The current expenditures are estimated to amount to JD8.013 billion, with a 13.3 per cent increase from 2018, the minister said, attributing the rise of JD257 million to routine annual increases in the salaries of civil servants and army and security personnel.

The budget statement added that capital spending in 2019 is estimated at JD1.242 billion, with an increase of JD180 million from 2018, noting that growth in public expenditure is estimated at 13.4 per cent, compared with 11.7 per cent last year.
The budget statement also added that the draft 2019 general budget law is in line with a set of measures the government adopted to contain the deficit and help the national economy cope with regional and international economic uncertainties.

The Lower House referred the general budget and the independent public institution budget drafts to its financial committee during a legislative session.