Khaberni - The International Monetary Fund said, the Jordanian government is seeking to implement a fiscal policy package to boost the revenues in the public budget for the year 2026, equivalent to 0.9% of the Gross Domestic Product, which allows for a limited increase in capital spending.
This was according to the fourth review report within the Extended Fund Facility and the first review under the Resilience and Sustainability Facility arrangements with Jordan, published by the IMF, and a copy of which was received by "Al-Mamlaka".
These revenue-enhancing measures and policies include increasing the rates of customs duties on durable and non-durable consumer goods except for basic food items (raising the effective tariff rate overall from 1.5% to 2.2%), with initial steps taken to rationalize the customs exemptions granted during the geopolitical tensions that occurred in the region, in addition to a decision implemented last July that contributed to addressing shortcomings in the vehicle tax framework, launching auctions for private and unique vehicle plates, and licenses for passenger transport services through applications.
The measures also include increasing the collection of special sales tax on tobacco and alcohol products, with intensified efforts to curb the illicit trade of tobacco products, in addition to continuing to implement tax and customs administration measures within the medium-term revenue strategy to achieve revenue gains in the short term.
The report stated that the pace of fiscal adjustment "will be accelerated" in 2027 and 2028 (with a total cumulative amount of 1.8% of the Gross Domestic Product), supported by reliable measures within the government's medium-term reform strategy.
The report noted that this adjustment is based on implementing reforms aimed at further broadening the revenue base, in line with the government's medium-term revenue strategy, including continuing to broaden the customs revenue base by rationalizing customs exemptions, enhancing the revenue collection from real estate transactions, including through updating the real estate registry system, expanding the sales tax base to continue combating tax evasion, including through the strategic use of electronic billing data, and continuing administrative efforts to improve collection efficiency and compliance.
The IMF report indicated that the government intends to adopt a new framework for customs duty exemptions, with the aim of identifying some exempted goods or those subject to a zero rate in preparation for their gradual elimination starting from 2027, while the Fund committed to providing technical assistance to implement the electronic billing system in accordance with international standards, ensuring the proper use of the data collected in tax audit and matching operations.
The Fund explained that these measures will be supported by the ongoing implementation of structural fiscal reforms to enhance tax and customs administration, public financial management, and public debt management. Specifically, as mandated by the Income and Sales Tax Department, to apply electronic invoicing on the sale of goods and provision of services, by issuing regulations requiring the submission of electronic invoices covering 100% of the expenses declared in tax returns, thus contributing to enhancing economic activity monitoring, addressing under-billing phenomena, and strengthening the audit and compliance functions.
The Fund praised the efforts of the Income and Sales Tax Department to increase compliance, including by expanding digitization of taxpayer services, improving data collection and analysis, and taking advantage of digital solutions and updating IT infrastructure, including through the implementation of a new integrated tax management system.
It also praised the government's ongoing implementation of a roadmap to modernize the public sector to enhance the efficiency and accountability of the public sector, especially through the completion of digitization 80% of all government services amenable to automation ahead of the scheduled deadline by the end of 2025.
The Fund noted that the government circular adopting the national electronic procurement system to cover all ministries and government agencies by June 2026, will also see the completion of linking the electronic procurement system with the government financial information management system by the end of December 2025.
