Economic Modernization Vision provides insight to simplify trade, tax regulations

AMMAN — Jordan’s Economic Modernization Vision envisages ways to simplify customs, taxes and shipping regulations for trade and retail business, according to the Jordan News Agency, Petra. The vision was launched by His Majesty King Abdullah on June 6, is set to be implemented in three phases over 10 years. It focuses on the trade sector as a top national priority, in light of its “high” contribution to the GDP, which last year hit 7.9 percent with a value of JD2.4 billion, according to official estimates.

Last year’s estimates showed that the trade sector employs 265,000 workers, making up 16.6 percent of the Kingdom’s workforce. Its exports in 2021, however, amounted to JD300 million, representing 3.3 percent of the Kingdom’s total exports.

Petra said the proposed regulations was prompted by the trade sector’s lack of e-trade legislation, since it relies to a “large” extent on imports, and suffers from “ineffective” customs, shipping, and taxes laws, in addition to difficulties in obtaining funding and unfair competition.

The vision, which was the outcome of panel discussions for three months, drew attention to the direct economic impact that will be reflected on the trade sector after its implementation. Its contribution to the GDP will increase from JD2.4 billion to JD3.8 billion in 2033, Petra said.

The number of the sector’s workers are expected to reach nearly 400,000, while exports will increase to JD1.5 billion in 2033.

The vision also suggested developing consumer protection legislation, modernizing the port of Aqaba and its warehousing infrastructure, providing support for trade funding, expanding trade partnerships, free trade agreements, and creating a database of traded goods and services.

Al-Ghad News said the Economic Modernization Vision envisions a campaign to spread awareness about the financial culture, and lending to micro, small and medium enterprises.

It said the vision suggested creating a pre-approved list of donors and lenders to small finance companies, developing the regulatory framework for financial leasing companies, and legislation and regulations, which could meet the needs of the fast growing financial technology sector.

The vision is also keen on developing the capital market, speeding up the digital transformation, establishing a local reinsurance company and restructuring the insurance sector, developing a roadmap for the financial sector’s development and detailed strategies for sub-sectors.

It also addressed the strategic capabilities, market priorities and financial services, especially the continuing to develop the sector since it is the basis that enhances the economic growth and improves access to finance.

It pointed to the sectors’ potentials and priorities, which fall under the market and financial services sector, such as banking through continuous development.

The financial leasing sector must also be developed to become a comprehensive source in micro-enterprises, small and medium establishments, according to the vision.

Likewise, the sector also prioritizes advancing the microfinance to encourage social and economic growth, and to work on developing capital markets to contribute to investment and financing, so that Jordan becomes a leading regional center and investment destination for financial technologies.

The vision forecast that the direct economic impact that will be reflected on the market and financial services sector during the implementation of the vision, will see GDP jump from 2.3 percent in 2021 to 4.6 percent in 2033.