The Senate’s Finance and Economy Committee on Monday approved the draft laws for the 2020 state budget and the budgets of independent government institutions as referred by the Lower House.
Prime Minister Omar Razzaz, during the meeting chaired by Senate President Faisal Fayez, said that the government and the constitutional authorities are working in an integrated manner towards creating a budget that responds to the Kingdom’s opportunities and challenges.
“Jordan cannot isolate itself from the region”, which is experiencing accelerated events requiring preparation for a variety of scenarios, the premier said, expressing confidence in the Kingdom’s ability to overcome the various challenges it faces.
Razzaz also reviewed the government’s measures adopted during the past year, including the stimulus packages, which came up with “tangible results” in various fields, the Jordan News Agency, Petra, reported.
The government seeks to adopt four to five water-related projects, as well as a railroad that links the Kingdom’s northern and southern parts, he said.
Commenting on the raising of capital spending to 33 per cent, Razzaz said that this move is intended to stimulate investment, which contributes to development and creates job opportunities.
He also reaffirmed that the government’s strategy focuses on diversifying energy sources, with the goal of achieving self-sufficiency.
Referring to the merging of public institutions which have similar mandates and functions, Razzaz said that in 2019, the government abolished and merged 10 entities.
He highlighted that the government is moving towards developing a number of ministries and institutions this year.
Finance Minister Mohamad Al-Ississ, for his part, said that “the government’s strategy focuses on restoring trust in the Kingdom’s economy without sacrificing financial stability”.
Salary raises will not affect the deficit, he said, adding that increasing capital spending will contribute in regaining economic growth momentum.
Five directorates have been created within the Income and Sales Tax Department as part of the government’s move to computerise the monitoring of tax and custom evasion, the minister noted.
The minister added that the government has also increased the allocations for the National Aid Fund, highlighting that the new economic programme focuses on “real reform” related to cutting business costs, in addition to addressing tax and custom evasion.
The Kingdom’s relation to the International Monetary Fund (IMF) is a consultative one, he said, pointing out that IMF’s mission to Jordan is reviewing the new economic programme designed to maintain the Kingdom’s economic growth momentum and financial stability.
The 2020 state budget draft law forecasts a rise in domestic revenues to reach JD7.754 billion, registering an increase of 10.4 per cent from the JD7.021 billion reestimated in 2019.
Foreign grants are expected to reach JD807 million in 2020, the same as the reestimated value in 2019.
The deficit in the 2020 budget is estimated to reach JD1.247 billion after grants, up from JD1.215 billion in the reestimated value for 2019.
Before grants, 2020’s deficit was estimated in the law at JD2.054 billion, or 6.4 per cent of GDP, compared with JD2.018 billion of the reestimated 2019 deficit, constituting 6.5 per cent of GDP.
According to the draft law, tax revenues are expected to increase by JD853 million to JD5.651 billion compared with JD4.798 billion reestimated for 2019, while non-tax revenues are expected to see a 5.4 per cent drop to JD2.103 billion in 2020, down from the JD2.223 billion reestimated for 2019.