Domestic revenues in the first third of 2021

Salameh Darawi
Salameh Darawi (Photo: Jordan News)
The prevailing impression among the public is that the general budget is in a tough financial position, and that indictors are severely on the decline due to the economic recession and the decline of the various economic sectors.اضافة اعلان

Official statistics released by the Ministry of Finance show that the first four months achieved numbers opposing the prevailing negative impressions and expectations, as tax revenues increased by 27.3 percent compared to the same period last year, and increased by 23.3 percent compared to the same period in 2019.

The increase in tax revenues is attributed to a hike in income tax during the first third of the year, amounting to 20.8 percent, (JD105 million); and 4.8 percent, (JD28 million); compared to the same periods of 2020 and 2019 respectively.

Real estate tax also increased to reach JD9 million compared to the same period last year, constituting a 90.2-percent rise; while it marked a 33-percent decline compared to the first third of 2019.

Revenue from sales tax, which represents the main artery of local revenue, grew by 29.7 percent (JD285 million) in the first third of 2021, compared to the same period in 2020, while they increased by JD345 million compared to the same period in 2019. The growth was mostly attributed to a 35.1-percent rise in taxes collected from imports, 12.2 percent from local goods, 30 percent from the service sector, and 49.3-percent from the commerce sector.

Custom fees also increased by 32.8 percent compared to the same duration in 2020, and by 9.2 percent compared to the same period in 2019.

After a major and unprecedented setback last year registering a decline nearing JD1 billion, non-tax revenues bounced back in the first four months of the year, with growth of 63.3 percent compared to the same duration last year.

This rise is the result of increases in collections of land fees (70.8 percent), stamps (33.6 percent), work licenses (215 percent), vehicle licensing and registry fees (38.3 percent), and other revenues (31.4 percent); including mining fees (253.5 percent), and custom services allowances (20.9 percent), constituting 34 percent rise during the first third of the year. As a result, local revenues increased by 34 percent (JD651 million) during the first third of 2021, an increase of JD82 million during the same period of 2020.

The aforementioned figures demonstrating the growth of domestic revenues in absolute values and percentages in light of the pandemic have economic justifications, which argue that the cogs of the national economy are running positively, despite the difficulties. This is particularly true as it pertains to the tax structure, which has achieved impressive success, as it had a great impact in compensating for the Treasury’s non-tax revenues, which declined last year due to closures and curfew measures.

The tax reform implemented at the beginning of 2019 has begun to bear fruit for the Treasury, through actual efforts to combat tax evasion, which was evident in various sectors, as well as through expanding the taxpayer base methodologically to include segments of large impact on tax revenues, such as physicians and lawyers.

This is in addition to a clear growth in some (not many) economic sectors, which led to an increase in the Treasuries’ tax returns, not to mention the gradual return of Royal Jordanian Airlines’ operations, along with the reopening of sectors and slashing of curfew hours, which contributed to the growth of the state’s non-tax revenues from the various fees.

The positive growth of domestic revenues is a win for the Finance Ministry’s team, which stood its ground during the pandemic, and at the same time, fulfilled all its internal and external obligations without delay.

This financial success will remain relative unless the ministry rises up at the same pace to address the issue of public debt, which has reached 108 percent of GDP, which is a very unsafe level, requiring rectifying measures similar to those imposed on taxation.

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