Gov’t to Prepare Deficit Plan, ‘Income Exemptions’ Cost JOD922m in 2015

تم نشره في Thu 2 February / Feb 2017. 01:00 AM
  • Ministry of Finance Amman - (Archives)

AMMAN —AlGhad— The government has begun working on an income plan to tackle budget deficit, roughly JOD900 million in 2016, in order to bring it to a break-even point with the conclusion of the programme with the International Monetary Fund (IMF), in 2019.

The government’s first light was shed on the scale of exemptions extended, estimated at JOD3 billion in 2015, which comprise nearly 11.6 per cent of the Country’s Gross Domestic Product (GDP), for the same year.

Meanwhile, direct exemptions on income taxes for individuals have cost the Treasury a total of JOD922 million, according to Finance Ministry data.

Separately, direct tax expenditures and indirect exemptions cost JOD1.094 billion and JOD2.005 billion, respectively.

The first category of indirect tax exemptions include exemptions on domestic commodities, goods, and services cost the Treasury an approximate total of JOD874.5 million, including the exclusion of certain goods and services, as well as the variance in the general sales tax; 0, 4, 7, and 8 per cent, which is intended to be resolved by the unification of the general tax at 16 per cent.

However, Finance Minister Omar Malhas did explain earlier that 70 per cent of domestic foodstuff commodities, pharmaceutical products, and raw materials will not be affected by the tax raise caused by the unification of the General Sales Tax

The second category is imported commodities, goods, and services, which cost the treasure around JOD286.5 million in exemptions, ranging from zero to 8 per cent.

As for the third, categorised under preferential agreements, those have cost the state nearly JOD47.8 million in 2015, between accrued receivables and exemptions extended for developmental areas, notwithstanding, whereas preferential treatments under special agreements have cost the state a total of JOD316.2 million.

Special taxes, on the other hand, over the year 2015, have been estimated to have cost the state around JOD138 million, in addition to the fifth category, mainly exemptions on customs, which have in total cost around JOD705 million, approximately 2.65 per cent of GDP.