Alrai - Finance Minister Dr. Muhammad Al-Asas said that the government has taken a decision to reduce the sales tax on 76 essential commodities for every Jordanian household.

Reduced goods include tax, food and school supplies that are already subject to either the 10 percent or 4 percent tax, where the tax will be reduced by half to be subject to the new rate of 5 percent or 2 percent.

In his response to the House of Representatives discussions of the draft general budget and government units for fiscal year 2020, the Minister of Finance, after the Prime Minister's response, confirmed the government's intention to continue its efforts to enhance the path of financial and economic reform.

He pointed out that the government worked in preparing the budget to implement the royal royal directives in order to improve the citizen’s standard of living and create job opportunities for the people of the country, increase salaries for civil and military workers and retirees, as well as prepare a stimulating budget for investment, and create a general climate to encourage private sector participation in development investment projects Income-generating in different regions of the Kingdom.

He pointed out that despite the persistent instability in the region during the past year, the national economy has maintained its stability, and positive developments have emerged, indicating a gradual improvement in the performance of the economy.

He said that the gross domestic product at constant prices during the first three quarters of 2019 grew by 1.9 percent, and national exports increased by 8.2 percent during the first ten months of the year 2019, compared to 4.0 percent in the same period in 2018.

The current account deficit of the balance of payments declined, to reach about 3.4 percent of GDP during the first three quarters of 2019, compared to 9.3 percent in 2018, and tourism income increased by 9.4 percent, to about 3.5 billion dinars, and remittances of Jordanians working abroad grew to reach About 2.2 billion dinars during the first ten months, according to the Minister of Finance.

Al-Assas pointed out that foreign currency reserves rose until the end of November 2019 to reach $ 13.8 billion.

He expressed his hope that the measures launched by the government related to the stimulus packages, which included several measures to stimulate the national economy, stimulate investment and give a strong impetus to the productive sectors to revitalize exports as an engine of economic growth, and to promote the commercial sector and enable it to regain its vitality.

He stressed that the government has prepared an exceptional budget that differs from its predecessors, making the improvement of citizens ’income and livelihood and stimulating the economy the first goal of politics without compromising financial stability and sustainability through unusual procedures in programming and preparing budgets before, first, that the budget is based on disclosure and realism without counterfeiting or Beautification, but rather shows the financial and economic reality as it is, and the second is the fiscal policy that reflects the direction of the economic cycle, especially since the treatment of the deflationary situation of the economy is not dealt with a deflationary policy, and therefore the capitalist developmental productive spending has been increased in a way Unprecedented, at 33 percent, the highest in years.

And Al-Asas explained that, despite the difficult financial conditions, the government decided to allocate financial allocations to increase the salaries of workers and retirees in the military and civil services by about 330 million dinars, and it also allocated the necessary funds to finance some stimulus economic packages that included exceptional measures that won praise and appreciation of various sectors Economic budget, and included its costs and expenditures in the 2020 budget, which do not increase the taxes.

Al-Asas added that the government increased spending on the social safety net, strengthened and expanded social protection, improved procedures for delivering support to those entitled to it, and adopted several measures aimed at achieving this.

He said that the government has processed the dues and paid its arrears to their owners in a way that reduces economic and financial distress for them, and also reduces the government’s benefits from these dues and injects the necessary liquidity into the economy.

With regard to domestic revenue for 2020, Al-Asas said that the increase in local revenue was estimated at 733 million dinars, or 10.4 percent, compared to 2019, based on the nominal GDP growth of about 4 percent during 2020, and the growth in income tax income by about 207 million A dinar to reflect growth in GDP on the one hand, and reflect the impact of the implementation of the new income tax law on the other hand and measures to combat tax evasion.

He said that the revenue growth from the sales tax reached about 591 million dinars to reflect on the natural growth of 4 percent, and the effect of including fees on oil derivatives within the sales tax, which was classified as non-tax revenue, and the impact of measures to reduce the tax on a group of goods, and the decline in revenue other than The tax is about 120

Million dinars, or 5.4 percent, mainly due to the reclassification of fees on oil derivatives.

Al-Assas also pointed out that public debt is one of the main axes to which the government attaches special attention, and considers that reducing the ratio of public debt to GDP can be achieved either by reducing public debt or increasing GDP.

With regard to public debt, the Minister of Finance stressed that the government seeks, through increasing exports and domestic and foreign investments, to achieve economic growth that enables us to reach the public debt as a percentage of the product to acceptable and sustainable levels.

The government will also take advantage of available financing alternatives, especially concessional borrowing agreements that contribute to covering the financing gap, and by reducing borrowing costs in terms of low interest rates and long grace periods.

He pointed out that the government has, for the first time, made financial allocations for partnership projects with the private sector within a separate item in the budget for 2020, to reflect its interest in partnership projects between the public and private sectors, in order to restore the momentum of growth and raise the pace of investment through a mechanism that ensures the achievement of efficient spending of public money, as well as Upgrading the concept of partnership to move into implementation and achievement.

He talked about the government's decisions to cancel and merge a number of independent bodies and government institutions, stressing that the government is determined to move forward in this important reform direction with the aim of raising the efficiency and effectiveness of the performance of government institutions and controlling their expenditures.

As for what was stated in the report of the Finance Committee for Representatives, regarding the additional burden that medical treatments pose on the general budget, Al-Assas said that the government and in the draft budget in 2020 monitored the financial allocations necessary for the medical treatment item, which amounted to 125 million dinars, to ensure that it is directed to those entitled to it and on new grounds To grant these exemptions.

He pointed out that the government monitored the financial allocations in the 2020 budget to pay a large part of the financial obligations of many ministries, government departments and institutions, which will have a positive reflection on stimulating economic activity and mitigating the slowdown witnessed in some economic sectors.

The government also recently paid an amount of 350 million dinars, of the value of arrears and accumulated obligations, which leads to reducing the balance of financial arrears and reducing costs on the treasury, achieving efficiency of public financial management, enhancing confidence in financial transactions as well as revitalizing the economy and improving overall performance effectiveness.

He affirmed the government's keenness to seek justice by directing the payment of financial dues, pointing out that the most prominent sectors for which the financial dues were paid are: the contractors sector, medicine warehouses, hospitals, land acquisition, transportation, health and water sectors.

Al-Asas stressed that the government is most determined to take measures to improve tax and customs administration, to combat tax and customs evasion and to promote the application of penalties stipulated by law, because tax and customs evasion is a crime against the homeland, and under no circumstances should it be tolerated.

And that the government recently implemented structural measures in the Income and Sales Tax Department to ensure improvement and increase in collection and raise the efficiency of workers, where 5 new directorates have been created, the Billing Affairs Directorate to follow up the extent of commitment to applying the national billing system, and the Professions Tax Directorate that aims to raise the tax liability for professionals, The Directorate of Employees and Deductions, which monitors the tax obligation of employees and employees, and follows up on the deduction process.

The Directorate of Taxes of Registered Institutions in the Development Zones and Free Zones has also been created to achieve the tax obligation for the taxpayers registered in it, in addition to creating a tax institute with the aim of developing the capabilities and skills of the human cadres working in the department and workers in related institutions and companies from the department's partners, and all these measures aim to achieve justice in The tax obligation without exempting the taxable and raising the burden on them.

He added that the government is currently working to implement the electronic digital control system for each of the products of these factories, and to put a special stamp and electronic signals for these products in a way that enables tracking the source of any quantities of smuggled smoke in the Kingdom. The measures to combat tax and customs evasion of tobacco have been reflected positively on revenue.

With regard to the committee’s recommendation to review pension salaries for retirees before 2012, Al-Asas explained that the increase in pensions includes all retirees in the civil apparatus, all military retirees before 1/6/2010, and all military retirees of the rank of lieutenant and below 1/6 / 2010.

Regarding a recommendation to raise the minimum wage, Al-Asas indicated that the Tripartite Commission for Labor Affairs is studying the amendment of the minimum wage to take the appropriate decision in this regard in light of the current economic and living conditions, taking into consideration the negative impact of this on investment and the competitiveness of sectors.

As for the financial committee’s decision to reduce current and capital expenditures by 226 million dinars in the draft general budget law and the government units budgets law for 2020, he emphasized that the budget estimates for 2020 came based on realistic studies and in-depth discussions of all aspects of spending within the budgets of ministries, departments, and government units.

He also indicated that reducing current expenditures by 63 million dinars, including salary allocations and operating expenses, will negatively affect the ability of government agencies to cover their obligations, and will lead to an increase in arrears and outstanding and outstanding claims.

As for reducing the capital expenditures by 163 million dinars, he stressed that the reduction of capital expenditures, especially those related to their implementation of loan and grant agreements, will negatively affect the implementation of the agreements signed with a number of donor and lender countries, and failure to fulfill the achievement of the committed indicators, and thus the loss of the amounts expected to be supplied to the treasury under These agreements, in addition to the impact of this reduction on the implementation of development projects in the governorates of the Kingdom.

He reiterated that the “2020 budget” is realistic and real that meets our national needs and does not include any cosmetic measures, despite the measures adopted by the government that include increasing the salaries of civil and military workers and retirees, increasing the allocations for the National Aid / Supplemental Fund, and maintaining monetary support, And measures to expand the social safety net, increase the allocations of capital development projects in an unprecedented manner, and include the costs of economic stimulus packages in the budget, it was able to reduce the initial deficit from 3.1 percent of GDP in 2019 to 2. 3 percent in 2020.

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