Reducing customs duties has not helped revive the economy

(Photo: Jordan News)
AMMAN — The government’s decision to reduce customs duties for several sectors has yet to prove any positive and tangible impact on the economy a few months after implementation, sectors representatives say.اضافة اعلان

It neither lowered prices for consumers nor revived commercial activity, despite the advent of the holy month of Ramadan, which traders used to rely on in the past years to move the wheel of the economy.

Representatives of several sectors stress that the impact of the decision is still not clear due to the rise in prices, and the higher cost of production inputs globally, following the Russian-Ukrainian crisis, and urge the government to take immediate and drastic solutions to help revive the economy.

The head of the Restaurant and Sweets shop Owners, Omar Awwad, told Jordan News that reducing customs duties had no effect on consumers, “due to the global rise in prices”.

“The restaurant sector did not feel the effect of reduced customs duties either,” he said, adding that “prices even increased”. For example, he said, the price of a ton of chickpeas rose from JD400 to JD500, and a gallon of oil that was sold for JD22 now sells for JD32 “despite the fact that the Ministry of Industry and Trade has set the price cap at JD29”.

Awwad added that “there is a tacit agreement among merchants to sell at the highest price, and the problem here is that the role of the Ministry of Industry and Trade authorities responsible for monitoring merchants’ activity is totally hidden”.

That, he stressed, makes it incumbent on the ministry to play a strong role in controlling the monopoly of some traders.

The head of the Freight Forwarders and Logistics Association, Nabil Al-Khatib, told Jordan News that traders and consumers might feel the effect of reduced customs duties several months later, reiterating that “the impact is still not reflected due to the global rise in prices”.

He added that “there was an increase in the prices of goods more recently imported due to the unprecedented rise in the prices of production inputs and freight charges around the world”.

Head of the Syndicate of Merchants of Cosmetics and Accessories Mahmoud Al-Jalis told Jordan News that “there is no real and clear impact of the government decision to reduce customs duties so far” for the same reasons: the rise in freight charges, and in the prices of commodities and raw materials.

Jalis said that even though citizens have started to prepare for Eid Al-Fitr, “the commercial movement is still very weak”, and urged the government “to take more serious decisions to protect merchants and increase liquidity for citizens”.

Amman Chamber of Commerce clothing sector representative Asaad Qawasmi confirmed that demand for clothes is still very weak, because citizens’ priorities seem to have changed; “they are more interested in buying food and drinks at these times than buying clothes”.

Qawasmi, however, told Jordan News that “we expect the turnout to increase in the second half of Ramadan and the approaching Eid Al-Fitr”.

“I can say that we are currently going through a stage of recovery after the difficult conditions resulting from the COVID-19 pandemic, including lack of liquidity and weak purchasing power,” he added.

According to Qawasmi, “prices are stable despite the rise in freight charges and raw materials prices”, and the reason is “the government’s decision to reduce customs tariffs, the presence of many offers that encourage citizens to buy, and the high competition among traders”.

Read more National news
Jordan News