(MENAFN- Alghad Newspaper)
According to our agreement with the International Monetary Fund (IMF), the Treasury must collect an additional JOD550 million. Knowing our governments, the Treasury will probably skim it off of our incomes, as citizens, of course. Where else will they get half a billion dinars from?
Notably, the point of it is to improve financial indices, and above all control the budget deficit and maintain a safe debt ratio. But the IMF does not tell the government where to get its money from.
The Fund, however, does set the target economic and financial figures for the government.
Needless to say, there are countless ways to pull this one off.
Grants are one way to meet the goals of the IMF programme, and so is raising public income from fees on commodities and services.
Borrowing to meet the IMF's criteria doesn't serve the purpose of the programme. Quite contrarily, borrowing will only increase the very criteria we are trying to lower; debt.
The only other alternative to the three options above is to increase GDP; to achieve an outstanding growth rate which would avoid Jordanians the woes of inflation and price hikes.
Now, as non-refundable grants and aid have been dropping annually, and Arab aide has completely ceased, Jordan's only source of financial support is the US and European Union.
This renders the wait on aid and grants to cover the additional JOD550 million, fruitless.
Meanwhile, whereas taxation sounds as the only resort at hand, the truth is that debt stands at a stupendous level, estimated in 2017 at nearly 94.3 per cent of the total GDP.
In 2016, it comprised 95.1 per cent of the GDP.
Public debt stands at JOD26.12 billion, so far, according to the February figures of 2017.
This is a humongous figure.
Just think about it hurts the mind. It raises an important question, no less crucial than the fact itself; can Jordanians afford to pay more taxes in order to cover the set target for 2017?
Throughout the year 2016, the government collected JOD450 million.
To make more this year, can the government pass a bundle of even tougher financial and taxation decisions which will most probably drain the citizenry dry?
For years, the government has failed to devise other ways to deal with economic challenges.
Bearing in mind the general discontent with the government's performance over the years, can it take such unimaginable steps?
In the face of such unforgiving circumstances, one voice comes sounding across the distance separating Washington from Amman, saying yes, it is doable.
Chief of the IMF mission to Amman, Martin Cerisola, claims that 95 per cent of Jordanians do not pay income tax, and that public revenues from GDI do not exceed 0.4 per cent.
Theoretically, it sounds plausible.
In an exclusive interview with AlGhad, Mr Cerisola said that Jordan is making progress in the Extended Fund Facility (EFF) programme. In fact, he said, Jordan is doing better than expected, financially speaking.
This financial improvement, nonetheless, according to the Cerisola, comes at the expense of quality, including the shrinkage of capital and social expenditures, compared to the guiding indices.
It is no secret that the IMF sees only numbers, figures, and ratios.
More so instead of reaching the targeted Debt-to-GDP ratio of 77 per cent by 2021, as planned, Jordan will get there by 2022 now, the IMF estimates.
If anything, this is an implicit admission that the debt-control programme may not go as planned, which would require further sacrifices from Dr Hani Mulqi's government.
So, will Mulqi's Cabinet push for more taxation and collection?!
We shall wait and see, and as we do, we shall continue this discussion in further articles.
This article is an edited translation of the Arabic version, published by AlGhad.
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