Jordan Times
Thursday, June 17, 1999
House expected to endorse sales tax hike
By Dima Hamdan
AMMAN — Deputies said they expected the Lower House to endorse the sales tax increase by a majority during Sunday's session despite public displeasure with the bill and desperate attempts to find other sources of revenue.
“Voting in favour of forwarding the draft to the committee is an implied approval of the tax [increase],” said Deputy Bassam Haddadin (Zarqa).
Deputies were at loggerheads during Sunday's session, in which the majority wanted to dismiss the draft saying that citizens suffering from poverty and unemployment cannot and should not be burdened with more taxes.
The government issued the draft, saying that it was the only option available to compensate for the loss of JD75 million due to a reduction of customs on imported products and industrial inputs.
“Compensating the loss [in the state treasury] is not the only issue. We need to reconsider revenues, public expenditure and our priorities as well,” said Haddadin.
“Some lawmakers believe that industrial inputs have more priority than increasing wages [of public employees]. Others want to focus on improving the process of tax collection and combating tax evasion,” the deputy added.
During the last meeting, Deputy Ali Abul Ragheb (Amman Third District) defended the draft, saying that the increase will not affect the poor because it is not applicable to 78 basic commodities such as food and medicine.
“Poor people have other needs too,” said Deputy Mahmoud Kharabsheh (Balqa).
“We cannot assume that they do not need other products which are subject to the sales tax.”
Kharabsheh suggested increasing the income tax as a fair alternative, because the tax percentage increases in parallel to the increase in income.
However, Kharabsheh said he “might vote in favour of the draft if it was the only means available to compensate the treasury.”
But for Deputy Khalil Atiyeh (First District), a hike in the income tax is not a valid option.
“The income tax is only imposed on a small segment of society,” Atiyeh said.
“Increasing it would also hinder investment, and several individuals and companies are evading it.”
Although Atiyeh is a member in the Economic and Finance Committee, he said he did not approve of the sales tax draft and wanted to explore other options including cutting expenditures in governmental departments and for official trips, fighting corruption and eliminating the import of products that would harm local industry.
Local dailies on Wednesday reported that the committee had approved the sales tax draft and proposed issuing monetary compensations of JD 7-10 for public employees earning JD150-250.
The committee's report also approves reducing customs on imported products from 40 per cent to 35 per cent, and on industrial inputs to 10 per cent.
However, Abul Ragheb said the reported figures were “unofficial and not final.” He declined to comment further until submitting the final draft to the Lower House speaker.
The committee's recommendations will be discussed during the next House session on Sunday.