Gov’t decision to revamp customs tariffs draws mixed reactions from economists, merchants

AMMAN — Economists and merchants on Tuesday expressed mixed views regarding the government’s recent decision to revamp customs tariff regulations to include only four categories. 

Government officials stress that this decision will positively affect the trade sector and enhance consumers’ purchasing power.

While merchants and importers praised the step saying it will revive the market and encourage people to buy goods, economists said the step might "harm the national products and increase unemployment in the Kingdom".

The government announced that the customs tariff will be decreased to 5 per cent on most imports that are not locally available, according to government officials who pointed out that that a number of economic establishments now benefit from the unified licensing measures that process applications in one day instead of 15 days.

Economist Wajdi Makhamreh said that the recent government's decision "is a bit too late since international prices have witnessed a hike over the years".

"The government's decision is basically meant to deal with imported inflation in light of the increase of the prices of international goods," Makhamreh told The Jordan Times.

Makhamreh warned that the decrease in customs fees might harm national products.

 "Decreasing the fees on the international products that are also manufactured locally might result in many factories shutting down, which will increase unemployment rates," Makhamreh told The Jordan Times.

Makhamreh added that it is the responsibility of the government to "closely monitor the situation to make sure the local industry will not be harmed".

Economist Musa Saket added his voice to Makhamreh saying it will pose “a big threat” for the local products and contribute to increasing unemployment among Jordanians.

It will also work to quash any future ideas by individuals who are thinking of having their own production lines, Saket told The Jordan Times.

"Many people will be deterred to start their own business or ideas because the customs fees for competing international products are very low," Saket said.

Saket also criticised the manner that the government adopted when passing the new customs fees.

"The government did not fully consult with the private sector to examine its ramifications before taking such a decision, which is an indication that there is no real partnership between the private and public sector," according to Saket.

But merchants and importers voiced a more optimistic opinion about the government’s recent decision; saying that the effects of the decision will be sensed gradually within the next three months.

Merchant and importer Mustafa Khirfan said the decision was an important step that will help reduce the cost of some food products, especially before the holy month of Ramadan, the Jordan News Agency, Petra, reported.

The owner of Sameh Mall Groups Tareq Hijazi said the decision will have a direct, positive impact on the prices of commodities in the local market "which will reflect positively both on the merchant and the consumer", Petra reported.

"This will surely increase buying powers in the local market, which will provide more cash flow and a demand on various goods and products," Petra said quoting Hijazi.

Al Farid Trade Director Nabil Farid agreed with Hijazi saying that the decision will have a "powerful effect within the next two months when the new imported goods arrive to the Kingdom," Petra said.