On Exemptions, Bread Subsidies, and Other Priorities

By Fahed Khitan

تم نشره في Tue 3 October / Oct 2017. 12:00 AM
  • Fahed Khitan

Tax exemptions ranked among public’s top points of interests in these last few weeks, after leaks came out of the government’s intentions to shrink them in the upcoming amendments.

Rightly, this made a lot of people angry.

It turns out, however, that shrinking tax exemptions was never on the Cabinet’s agendas in the first place!

Prime Minister, Dr Hani Mulqi, made a clear explicit statement, reaffirming that amending tax exemptions never was nor will be an option at this point.

More so, the Premier underscored that the only aspect of it that is currently under review is the exemptions extended to corporations and banks.

In the meantime, the Cabinet is looking into intensifying tax evasion penalties, which is one of the public’s many demands.

So far, the government has yet to arrive at a finalised conclusion for the amendments to the income tax law.

It is unlikely that these amendments will be reviewed by parliament before the end of the year. Especially under the current circumstances, with the financial pressures building up, and the Budget Bill being the utmost priority at this point.

According to experts on the constitution, it is illegal to discuss any taxation laws while the Public Budget Bill is under review.

Likewise, it seems the fuss over the bread subsidies is also caused by a general misunderstanding.

While parts of the underway discussions did indeed address the costs of bread subsidies, the suggestion was not —at all— to cut bread subsidies altogether.

Instead, the point was how to deliver the subsidies directly to the affected social segments, exclusively, to cut the costs of subsidising the entire national produce of bread.

Notably, there is nothing new about this.

For over two decades, the government has been looking into practical ways how to cut subsidy costs by directly delivering compensations to the households in need.

Bread is one the basic indispensable components of the Jordanian dietary.

Despite its falling presence on the kitchen tables of the Middle Class, for health reasons above all, it remains a crucial component of the greater majority’s everyday meals.

To the poor, bread is their everyday meal!

Nowadays, bread isn’t just the one bake we used to know. There are now dozens of kinds of bakes, and most of the bread people consume today is not even subsidised.

Compared to other costs, from transportation to education, fuel, and other basic commodities, most Jordanians do not have trouble securing their need of bread.

Meanwhile, the millions of expats and foreigners in Jordan get to buy their bread for the same prices, like other Jordanians. It is probable that the greater beneficiaries of the bread subsidisation programme are the foreigners, rather than the Jordanians.

Of course, the government’s biggest challenge at this point is finding a way to guarantee the delivery of subsidies to Jordanians who need it in cash.

All things considered, it may not be as hard as it sounds.

Most Jordanians in private and public sectors, both current and retired employees, have social security identifiers, tax numbers, and bank accounts. There are currently 100 thousand Jordanian households on national welfare too, those too can have their subsidies delivered to their bank accounts.

While at it, the government has to either double the cash subsidies to impoverished households on continued welfare, or increase their monthly salaries.

Meanwhile, households with a combined monthly income of over JOD2000, those surely do not need cash substitutes to bread subsidies, because they do not even consume subsidised bread!

In this endeavour to cut costs, the state must not abandon its role in support of the citizen, especially the less fortunate households.

As pressing the need is to revisit the subsidisation system and mechanisms, in order to redirect it towards supporting Jordanians who actually need it, more so is the citizen’s right.

In the meantime, the government needs to seriously address the issue of deteriorating education, so that Jordanians students can go to decent, clean, suitable schools, which is the least of their rights.

Likewise, it is crucial that the government founds for an advanced, practical, comprehensive, transportation sector that is above all, affordable.

This would do so much instead of the current chaos and the unbelievable costs of transportation people have to put up with. Lump sums of the citizen’s salary goes to transportation on a monthly basis.

Those are just aspects of the periodic costs and issues which need to be addressed as soon as possible, before it all escalates and blows up in our faces!

This article is an edited translation of the Arabic version, published by AlGhad.

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