(MENAFN - Jordan Times) Consumers on Monday complained they have frequently been the target of authorities' decisions to impose hikes in prices and taxes whenever there is a shortfall in public finances.
Responding to government's recent statements that economic and financial conditions in the Kingdom have reached worrying levels, consumers interviewed by The Jordan Times Monday said they are aware of the current difficulties facing Jordan's economy but added the situation has been "bad" for years.
Ahmad Saeed, a public sector employee, said he was not surprised by the news. "I know there will be a round of price increases soon, because this is the customary behaviour of our governments," said Saeed, who makes around JD400 a month.
On Saturday, Prime Minister Fayez Tarawneh announced a set of decisions would be implemented soon that would include austerity measures, subsidy cuts on certain commodities as well as amendments to some laws to increase state revenues, including the Income Tax Law.
He noted that the economic package aims to partially tackle the widening budget deficit, but insisted it would avoid affecting low- and middle-income Jordanians.
According to Khaled Awamleh, ordinary Jordanians usually have to pay the price for economic mistakes they did not make.
Awamleh, who works at an airline company, stressed that he and his employed wife, are struggling to cope with rising cost of living in the country.
"It is not true when decision makers say that limited-income Jordanians would not be hit by reducing subsidies on certain essential goods and energy products," said Maram Fouad, a public sector engineer, adding that prices of the majority of products would automatically go up with the rise in energy prices.
The government should focus on charging more taxes on large businesses and fight corruption and squandering of public money instead of resorting to the pockets of ordinary people, Mohammad Taweel, an accountant at a private company, said.
Food merchants also reject any government plans to raise taxes on food items.
President of the Foodstuff Traders Association (FTA) Samer Jawabreh yesterday criticised the approach of successive governments, which he said relies on hiking prices instead of stimulating economic sectors to generate higher revenues.
"What merchants want is to cut customs fees and taxes on food items," he noted, saying that incomes of the majority of Jordanians are being eaten away due to "ballooning" living expenses.
"Why is it the case that consumers usually have to be responsible for filling state budget holes?" he asked, suggesting that policy makers should charge higher taxes on banks, telecommunications firms and large mining companies to address the budget deficit.
The FTA head expected food prices index to go up by 4 per cent to 5 per cent if taxes increase, indicating the picture is not clear yet in terms of what items that may see higher costs due to lifting subsidies.
According to Minister of Finance Suleiman Hafez, the volume of government subsidies totals around JD2.386 billion annually.
Early this week, Hafez also noted that if the current economic conditions continue without any measures, the 2012 budget deficit would widen to reach JD2.93 billion before foreign aid, which was projected to total JD870 million, and JD2.06 billion after foreign grants, thus raising public debt from JD14.3 billion to JD17.5 billion by the end of the year.
In previous interviews with The Jordan Times, several economists suggested other options the government can use to improve state finances.
They proposed raising tax rates on banks to 35 per cent from the current 30 per cent rate in addition to telecommunications firms, which pay 24 per cent.
Experts have also called for raising tax rates on luxury products and services.
They also suggested increasing royalties on mining firms and adopting the progressive income tax regime, warning that average Jordanians should not remain the main financier of the government.
Last week, rapporteur of the Lower House Financial and Economic Committee MP Anwar Ajarmeh told The Jordan Times that the panel is considering an increase in the income tax rate on banks and mining companies.
A government official, who preferred to remain unnamed, also confirmed that the committee is discussing increasing the income tax on financial institutions from 30 per cent to 35 per cent, while the tax rate on mining companies may go up to 25 per cent from the current rate of 14 per cent.