Jordan: Cost Reduction Versus Tax Reduction

The plate du Jour in most Jordanian newspapers today is a discussion and a debate on taxes. The proponents of tax reduction argue that it would induce additional investments, thus expanding the economy and increasing the size of the pie from which tax revenues can be extracted. Those in the opposite camp, who advocate keeping the tax code as is, are concerned with the expanding deficit and argue that companies which generate the highest tax revenues will not be induced to invest further because of a reduction in taxation, and that any resulting savings will go to the bottom line. The debate is still raging.

The area where few dare to tread is the concept of cost/waste reduction as a means of enhancing revenues or making each Dinar count. Divining cost saving methods requires relevant experience* and hard work. It does not lend itself to slogans and is not particularly glamorous. One remembers the decision of the Water Authority to fix leaking pipes throughout the city of Amman. It was estimated that fixing the pipes is tantamount to increasing the water supply by 30%!

What is required today is a handyman with cross jurisdictional ministerial authority to do the fixing wherever it is required.

Read More »