Government approves 2024 budget without raising taxes, with highest capital expenditure

The government Wednesday approved the draft public budget law for the fiscal year 2024 ahead of referring it to the parliament. The Minister of Finance, Muhammad Issis, said the budget is the fourth consecutive budget that does not include a rise in taxes or fees and is the highest capital expenditure in Jordan's history. Issis noted that the government raised social protection allocations, adding that the 2014 draft budget would translate the government's royal directives to enhance progress in implementing the economic modernisation vision. He explained that the national economy would record "real" growth in 2024 at about 2.6 per cent and nominal growth of 5.1 per cent, noting that the economy would maintain moderate inflation rates, among the lowest in the world. He added that, when drafting the budget, the government considered the slowdown in global growth due to efforts to reduce inflation and regional developments without specifying what those developments are. Regarding developments at the level of public expenditures, he said the government has earmarked financial allocations to support the Jordanian armed forces and security services. The 2024 draft budget law included public revenues amounting to about JOD10.3 billion, an 8.9 per cent increase as opposed to 2023. Local revenues would rise to JOD9.6 billion, 10 per cent above their 2023 level, due to an increase in tax revenues of about 10.2 per cent to JOD7.2 billion without imposing additional taxes or a spike in current taxes. Issis said the government would expand the tax base, combat tax evasion, and improve tax administration, forecasting that reforms would increase income tax revenues by about 20 per cent. He added that expectations indicate that external grants would reach JOD724 million. In the draft budget law, the government allocated financial allocations to support strategic food commodities and support gas cylinders, in addition to increasing national aid allocations to enable it to accommodate a "larger" number of families eligi ble for support. The draft law provides larger allocations for the public debt, which has increased due to the global rise in interest rates as part of a US policy to curb inflation. Current expenditures were estimated at JOD10.6 billion and capital expenditures at JOD1.7 billion, bringing the total public spending to JOD12.37 billion. Capital expenditures increased by about 11.8 per cent as opposed to 2023 to JOD1.729 billion dinars, as allocations for the projects of the economic modernisation vision and the public sector modernisation map constituted 20.2 per cent of the expenditures. Military and security services projects constituted 16.9 per cent, municipal development programmes and decentralisation projects 18 per cent, while allocations for the remaining projects comprised 45 per cent of the total capital expenditures. The draft budget has reduced the primary deficit for the fourth year. The government reduced the primary deficit to reach JOD812 million at a rate of 2.1 per cent of the gross dom estic product, compared to 2.6 per cent in 2023. Total public debt would decline after excluding the Social Security Investment Fund debts, to 88.3 per cent of GDP, with the percentage continuing to decrease in the coming years to 85.7 per cent by 2026. Source: Jordan News Agency