AMMAN — On Wednesday,
Finance Minister Mohamad Al-Ississ outlined the main features of the draft of the General Budget Law for
the fiscal year 2024 in a legislative session before the House of
Representatives. He noted that the government aims to achieve a "turning
point in the initial deficit, attaining the first surplus in 2028."
اضافة اعلان
Al-Ississ highlighted that reforms in the tax
system and administration aim to maintain monetary stability, stimulate growth,
and increase reliance on internal resources to
cover public expenditures,
reported Al-Mamlaka.
He added that the 2024 budget project embodies
the continuation of the financial reform approach, sustaining Jordan's
exceptional performance in implementing structural reforms in public finance
progressively and fairly. These reforms have shielded Jordan from the woes that
befell other economies in recent years.
The minister explained that the government
will persist in measures aimed at expanding the tax base;
rationalizing tax exemptions while enhancing incentives and advantages to create an attractive
environment for investors. It will also enforce legislative reforms previously
approved by the House of Representatives, fully implementing electronic
invoicing and tracking system, and imposing strict control on border smuggling.
Income tax revenues will rise by approximately
JD 325 million or 20 percent in 2024. This is in line with efforts focused on
increasing tax revenues without raising tax brackets. Sales tax revenues are
expected to increase by about JD 286 million or 6.4 percent, driven by the
nominal growth of 5.1 percent in output.
Al-Ississ added that the contribution of
income tax to tax revenues will increase to 27 percent in 2024, compared to
around 22.3 percent in 2020. Meanwhile, the contribution of sales tax revenues
will decrease to about 66 percent in 2024, compared to 71 percent in 2020.
These measures align with the
Royal directives to "improve revenues by combating tax and customs evasion and avoidance
without burdening citizens and the private sector excessively." This
requires the ongoing development of the tax and customs systems to safeguard
the rights of the public treasury and enable it to provide optimal services
deserving of citizens.
He added that in commitment to the Royal
directives to progress the implementation of the economic reform vision and
enhancing the public sector in relevant government entities, JD 348 million was
allocated for related projects in the 2024 budget.
Al-Ississ emphasized that "providing
sustainable Jordanian water sources is a strategic priority for Jordan.
Achieving water independence and commitment to royal directives, the government
will continue to prioritize the desalination and the National Water Carrier
Project. This priority is reflected in the 2024 budget as one of the most
important strategic projects in the economic reform vision."
The 2024 budget allocated funds are to enhance
social protection in various areas, raising allocations for the National Aid
Fund and Unified Cash Support to JD 262 million to support low-income families.
"Due to shocks on the supply sector in
global markets may extend for long periods, and to ensure the stability of
commodity prices, especially essential food items in the local market, the
government will continue enhancing the strategic wheat and barley reserves for
sufficient periods, increasing grain storage capacity, and accelerating the
implementation of the national strategy for food security," said the
Al-Ississ.
He added that the government will maintain the
prices of bread and gas cylinders. The budget for 2024 allocated approximately
JD 289 million for supporting such commodities, including JD 63 million to
support gas cylinders alone.
Al-Ississ mentioned that the government has
given significant attention to improving the education sector. Education
allocations in 2024 increased by about JD 91 million compared to 2023, reaching
around JD 1.436 billion. He affirmed that financial allocations continue to
double to support financially dependent university students, as well as support
for government and Royal charity universities and school nutrition initiatives.
The qualitative development of healthcare
services acts as a lever for quantitative expansion for all citizens across the
country. Allocated funds for health in the 2024 budget, including the Ministry
of Health, Prince Hamzah Hospital, and Royal Medical Services, increased by JD
156 million or 14 percent compared to 2023, reaching around JD 1.275 billion.
Social protection allocations in 2024 amounted
to about JD 2.349 billion, an increase of JD 128 million or 6 percent compared
to 2023.
JD 40 million will be allocated to the
Industry Support Fund, approximately JD 9 million will be provided to
industrial cities with natural gas to reduce energy costs in production
operations, including allocations to implement the national strategy for exports.
This aims to provide support to key sectors in the national economy, stimulate
economic activities supporting growth, particularly in the industrial and
export sectors.
The government will allocate JD 74 million to
the Ministry of Tourism to stimulate tourism, considering Jordan's attractive
tourism potential. Tourism is a key industry in economic growth and job
creation.
Al-Ississ affirmed that current expenditures
for 2024 amounted to JD 10.642 billion, an increase of about JD 854 million or
8.7 percent compared to 2023. This increase is attributed to the rise in
allocations for the military apparatus, public security apparatus, and an
increase in military and civil service salaries and civilian retiree pensions.
He added that the increase in current
expenditures is also due to the rise in public debt interest allocations in
2024 by about JOD 277 million compared to 2023, given the continued increase in
global interest rates due to policies aimed at global inflation containment.
He emphasized that the government allocated
JOD 100 million for
emergency expenses in the 2024 budget. This allocation will
address any financial requirements in case of developments or emergencies as
they arise.
The allocations for the salaries of the civil,
military, public security, and safety apparatuses, as well as civilian and
military retirement allowances, constituted 61 percent of the total current
expenditures. If the allocations for public debt interest are added, the
percentage becomes 80 percent of the total current expenditures.
Al-Ississ stated that the operational expenses
for the civil apparatus in 2024 amounted to about JD 559 million, representing
only 5 percent of the total current expenditures. This reflects the
government's policy of controlling and rationalizing expenses. Health sector
expenditures accounted for about 41 percent of operational expenditures, with
pharmaceuticals, supplies, and medical consumables comprising about 58 percent
of them.
He affirmed that the operational expenses for
the rest of the civil apparatus amounted to only JD 331 million, reflecting the
government's efficiency in managing public finances.
Regarding capital expenditures, they were
estimated at about JD 1,729 million in 2024, an increase of JD 182 million or
11.8 percent from their level in 2023. This is the highest value in the history
of general budgets.
The allocations for projects related to the
economic reform vision and the public sector modernization constituted 20.2
percent of these expenditures. Meanwhile, military and security apparatus
projects constituted 16.9 percent and the development of municipalities and
decentralization projects constituted 18 percent.
Al-Ississ explained that general expenditures
were estimated at about JD 12,371 million, an increase of JD 1,035 million or
9.1 percent from their level in 2023.
Regarding revenues, the minister stated that
local revenues for 2024 were estimated at JD 9,579 million, an increase of JD
873 million or 10 percent from their level in 2023. Tax revenues are expected
to increase by about JD 673 million or 10.2 percent without raising tax rates.
Non-tax revenues in 2024 would increase by
about JD 200 million or 9.4 percent, emphasizing that "it is necessary to
note that regional events cast shadows on revenue realization in 2023 despite
its success."
The estimated revenues for 2024 are based on
several assumptions, the most prominent of which is the continuation of the
regional situation without significant developments within the geographic and
time context. External grant estimates for 2024 were around JD 724 million or 7
percent of the total revenues of JD 10,303 million.
General revenues would increase by about JD
844 million or 8.9 percent from their level in 2023.
Al-Ississ clarified that
expected revenue developments indicate an improvement in self-reliance, with
the percentage of local revenue coverage of current expenditures reaching 90
percent in 2024 compared to 88.9 percent in 2023 and 74.4 percent in 2020.
He added that data shows a gradual improvement
in the sustainability of public finance and public debt. For the fourth
consecutive year, the initial budget deficit, comparing local revenues to
general expenditures excluding public debt service, will decrease to about 2.1
percent of GDP in 2024, compared to 5.6 percent in 2020, with a decrease of 62
percent
The government will reach a turning point in
the initial deficit, achieving the first surplus in 2028. Additionally, the
total public debt to GDP ratio will decrease for the third consecutive year,
reaching about 88 percent in 2024. It will continue to gradually decline in the
following years, reaching 79 percent in 2028.
Regarding government units, Al-Ississ stated
that the total revenues for government units were budgeted at about JD 852
million, compared to JD 790 million in 2023.
The total expenditures for government units
amounted to about JD 1,662 million, distributed as JD 1,097 million for current
expenditures and JD 565 million for capital expenditures. This is compared to a
total expenditure of JD 1,408 million in 2023.
He indicated that the net deficit before
financing for all government units in 2024 was about JD 810 million, compared
to JD 618 million in 2023. He clarified that "if we exclude the deficits
of both the Water Authority and the National Electric Power Company, estimated
at about JD 851 million, the net deficit turns into a surplus of about JD 41
million."
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