AMMAN — Traders in the
clothing sector interviewed by
Jordan News agreed that a government decision to lower
the sales tax would have a significant positive effect on the sector, which has
been witnessing stagnation since the onset of the COVID-19 pandemic, and even
before that.
اضافة اعلان
President of
the
Textile and Readymade Clothes Syndicate Sultan Allan told
Jordan News that the current sales tax is a big obstacle to the recovery of the sector and
called for a quick decision on the issue of reducing the tax, “as this has an
immediate and significant impact on the recovery of the economy and on reviving
the commercial sector”.
Allan said
that the government “should take an immediate decision to reduce the tax to 8
percent and see how things work, or it can begin with a gradual reduction too;
let the sales tax be 12 percent, then 8 percent, in order for the government to
have the opportunity to study the economic situation after the reduction and
the extent to which this decision impacts the purchasing power of citizens.”
He added
that a lower
sales tax will have an even greater impact than the lower customs
tariff, adding that it is still early to tell whether the prices of clothes have
decreased after the reduction of customs tariff, but that “it is expected that
they would be reduced by 3–5 percent. I agree with this expectation, but there
are several other determinants, including the removal of price ceilings for
clothing”.
“We are used
to stagnation in the periods between summer and winter every year, but the
stagnation the sector is going through this year is even greater than in the
past years,” Allan said.
“Traders
face too many challenges, such as employee salaries, rent and bills. An
increase in taxes or fees will make them raise their prices too,” he added.
Representative
of the clothing sector at the
Jordan Chamber of Commerce Asaad Qawasmi told
Jordan
News that the removal of price ceilings for clothing will negatively impact
the clothes price and contribute to minimizing the effect of lower customs
tariff, but still, “it is expected that prices would decrease a little due to
the fact that there is strong competition among traders and that the citizens’ purchasing
power has decreased”.
Qawasmi stressed
that traders need the government to reduce the sales tax, which “would have a positive
impact on both traders and customers”.
President of
the Textile and Readymade Clothes Syndicate Munir Deyye said the prices of
clothes are going to be reduced “by 5–10 percent only” because of the many global
developments, including the rise in the prices of raw materials and shipping
fees, “besides the expected impact of the removal of the price ceiling”.
Deyye said
the
government should reduce the sales tax, a move that would “inject liquidity
into the economy”.
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