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Ammon News - AMMONNEWS - Further enforcement of the rule of law in economic regulations and procedures is necessary to boost growth rates and the overall economic performance, according to a field expert.

Speaking at a session on civil state and the economy organised by the Friedrich Naumann Foundation for Liberty and the Free Thought Forum (FTF) on Saturday, economic analyst Jawad Abbassi said issues that require addressing include the taxation system, government expenditure on salaries and business regulation policies.

While a study by the European Central Bank shows that increasing taxation by 1 per cent decreases economic growth in the long term by 0.5 to 1 per cent, the government collects “high” taxes which are similar to European countries with advanced services, he said.

Not only are taxes high, but they are in many cases wrongly called fees, he said, explaining that fees are to be paid in exchange for a certain service to cover the cost of providing that service.
Therefore, it is wrong, for example, to have a variation in “fees” for registering cars or land based on their brand or area.

“A good taxation system has to be fair, neutral, clear and efficient,” Abbassi explained, adding that Jordan’s taxation system is unfair to middle- and low-income classes, who spend their entire earnings on taxes and fees, while upper classes do not pay taxes on their savings.
In 2004, spending on salaries at public agencies, excluding military agencies, stood at JD464.1 million, a figure that increased gradually to reach around JD1.05 billion in 2012, without a “tangible” improvement of public services.

Another area of injustice is the variation of electricity tariffs imposed on several sectors, as well as the “unclear bases” for tax exemptions, according to Abbassi.

Although the Constitution has set the basis for democracy by considering Parliament the source of power, democracy remains a culture of law enforcement, accepting others and respecting diversity, said Saed Karajah, FTF vice president.

He noted a lack of “civil state culture” among Jordanian citizens, adding that some senior officials’ feeling that they are above the law exacerbates the problem.

“It is a culture that cannot be instilled in a lecture or even through Parliament. It is a long process based on education… Education is the gateway into the civil state,” he said.

His Majesty King Abdullah’s Sixth Royal Discussion Paper titled “Rule of law and civil state” identified a popular misconception that equates the civil state with the secular state.

The civil state is the only constitutional system that defends religious freedom and the freedom of worship, as it is protected in the Constitution, said Karajah, who is also a lawyer, adding that even a parliamentary majority cannot violate this freedom, as regulations have to be reviewed and approved by the Constitutional Court.

*Jordan Times