Российско-Иорданский Деловой Совет

New tax system to lead to higher apparel prices, traders warn

By Omar Obeidat

AMMAN –– Garment importers and clothes shop owners on Monday said a recent government decision to subject imports to a new tax system will lead to an increase in prices and worsen the already slow market.

On Saturday, the customs department started implementing the decision by imposing a JD1 tariff on each kilo of imported clothes or 5 per cent of the value of the clothes, whichever is higher.

Salah Hmeidan, president of clothes traders association, said customs personnel used to assess the value of imported goods and then impose a 20 per cent tax, but noted that under the new system the JD1 per kilo tariff will always work out higher.

The new system will increase customs fees on imported clothes and ultimately lead to an increase in prices for end-users, he told The Jordan Times yesterday.

Hmeidan said he and other sector representatives met with Jordan Customs Department (JCD) Director General Ghaleb Sarayreh yesterday and called for postponing the implementation of the decision until the end of the year.

“If the customs department decides to adopt the weight formula for charging custom fees, the cost of each container will rise by between JD4,000 to JD5,000,” he remarked, adding the clothes market is suffering from a severe slowdown and “the new decision will make things even worse”.

The JCD official said he would send the traders’ demands to the Cabinet.

Nidal Ghanem, a shop owner in downtown Amman agreed with Hmeidan, noting that although he does not directly import clothes from other countries, prices at his shop will go up.

Ahmad Abu Obeid, another shop owner and importer from Irbid, complained that sales at his shop have decreased by almost 70 per cent since December last year. He pointed out that custom fees on winter clothes would increase sharply because they are heavier than summer clothing.

But Sarayreh believes the decision will reduce fees on imported clothes, explaining that although winter items might be affected, the majority of imports will benefit.

“The main aim of the decision is to encourage importers to bring high-quality clothes into the country,” he said, indicating that used clothes and textiles are exempt from the decision.

“Consumers will be the victims of the new decision and not traders, who will not forego their profits,” Mohammad Theib, an importer who has a shop in the city of Zarqa, told The Jordan Times over the phone yesterday.

Acknowledging that sales have picked up in the past two months due to the influx of expatriates in the country, Theib grumbled that 2010 was “a very bad year” in terms of demand for clothes.

jordantimes

Russian-Arabic Business Council

Всех заинтересованных в установлении и развитии сотрудничества с деловыми кругами стран Арабского Востока приглашаем обратиться в Российско-Арабский Деловой Совет по адресу:
109012 г. Москва, ул.Ильинка, 5/2
тел./факс + 7 (495) 929-02-55
тел. + 7 (495) 929-03-13/15/16
эл.почта: rads@tpprf.ru
сайт: www.rusarabbc.ru

© 2008—2010. Russian-Jordan Business Council
Developed by — JSC «Telehouse»