Jordan Times
Sunday, January 17, 1999
Senate endorses 1999 budget, urges reforms to Income Tax Law
AMMAN (Petra) — The Senate Saturday endorsed the state's JD2.160 billion l999 budget along with a report by the Financial Committee containing the Senate's recommendations on social and economic issues.
The draft budget, approved earlier by the Lower House of Parliament, will be referred to the Royal Court for ratification by Royal Decree.
At the outset of the session, attended by Prime Minister Fayez Tarawneh and Cabinet members, Financial Committee Rapporteur Kamal Shaer read the report and the recommendations.
The report supported a pledge from the government contained in the budget statement concerning the continuation of the economic reform programme and its steps to deal with public debt.
The committee said the budget contains positive features such as a four per cent drop in current expenditure from the l998 budget, and urged the government to concentrate capital expenses on investments in water networks, which should be given priority over other development projects.
The report expressed the committee's concern about the country's economic growth which began falling in l996. The report said the situation prompted the committee to hold a series of meetings with the government's economic team to discuss solutions.
According to the report, the annual economic growth rate dropped from 5.8 per cent in l993 to one per cent in l996 before starting to rise again in 1997. Economic growth that year was registered at l.3 per cent in l997, and in 1998, the country achieved 2.2 per cent GDP growth.
The committee recommended that the government publish monthly reports on the Kingdom's financial situation and said the government should adopt an effective five-year programme to reestablish the national economic balance to achieve reasonable economic growth rates.
Senator Ahmad Obeidat referred to Jordan's environmental situation, drawing the government's attention to the need for a safe and efficient strategy to utilise dwindling underground water resources. The Senator said 50 million cubic metres (mcm) of water is over-pumped from each underwater basin annually compared to 20 mcm annually in the past few years.
He also drew attention to the need for effective measures to halt pollution of underground water resources and soil due to the dumping of hazardous waste.
Senator Taher Masri said the draft budget again reveals monetary, financial and administrative imbalances from which Jordan has been suffering. He said 85 per cent of the state's budget is allocated to recurrent expenses such as salaries and the payment of foreign debts.
He warned that, unless the government adopts more practical measures to ensure higher economic growth, the aspirations expressed in the budget statement cannot be fulfilled.
These measures, he said, include reducing routine investment procedures, reducing customs procedures, and offering incentives for increased production and exports.
He said the government can confront unemployment and poverty only through qualifying Jordanians, through vocational training, to take up jobs in the local market currently filled by guest workers.
Masri said economic and political reforms can only be realised when social justice is achieved.
In a reply to the senators' remarks, Tarawneh said his government agrees with the committee's recommendations calling for the reform of the Income Tax Law. Further, he said, he supports its demands for achieving justice without discrimination among Jordanians.
He said the recommendation is in line with the government's policy of reducing customs duty on production inputs and compensating the loss to the treasury with an increase in sales tax.
The prime minister said the government has pledged before the Lower House of Parliament to give this matter due concern and attention, and that the government will organise meetings to determine the most appropriate form of investment in the Kingdom's three regions. The meetings will commence the first quarter of the year.
Tarawneh referred to plans for interaction with Arab, regional and international economies to invigorate the national economy, and said that Jordan can only achieve this through the private sector.
He said the government urges the private sector to act as the government's partner in development and shoulder responsibility. He added that the government will soon create a committee to help the private sector in its endeavour to stimulate the national economy.
Referring to education, the prime minister said the government agrees with the committee's recommendation to revise the system of accepting students to universities and vocational centres in order to best meet the needs of the local labour market.
Tarawneh said the government is deeply concerned about the drought situation and its adverse effects on agriculture and livestock in the country, adding that the Council of Ministers, who were to meet late Saturday evening, were to announce emergency measures to deal with the shortage of rainfall.
Tarawneh also said the Cabinet is taking measures to fiund a national water company to begin drawing water from the Disi aquifer in the south eastern region to Amman.