Amman, Jan. 3 - The Jordanian government has decided to remove customs duties and sales taxes on 13 essential commodities, local newspapers and officials said Thursday.
The move is part of the government's plan to ease soaring food prices which will increase further following this year's budget when the remaining subsidies on food and petroleum products are expected to be phased out to rein in the budget deficit.
Among commodities which are exempted from customs duties and sales taxes are rice, sugar, cooking oil, tea and dry milk.
A kilogram of rice in Amman currently costs 0.45 to 1 Jordanian dinars ($0.63 to $1.40), a kilogram of sugar is JOD0.45 and a kilogram of tea is JOD3.50.
Jordan's Industry and Trade Minister Amer al-Hadidi told reporters in Amman that he expected prices of these foods to decrease at different rates that could reach up to 10%.
The government didn't include wheat in the list, which could mean that it would continue subsidizing that strategic commodity.
Jordan's Finance Minister Hamad Kasasbah unveiled a 2008 national budget last month. He told parliament that planned state expenditure had been set at JOD5.2 billion for 2008, up 13.4% from a 2007 spending figure. The government forecast a budget deficit of JOD724 million compared with JOD616 million in 2007. The budget needs to be endorsed by the parliament.
Fuel prices are expected to soar if the government goes ahead with its plan to phase out subsidies on fuel.
Jordan's oil imports have soared to over $1 billion annually as the U.S. administration and Gulf States cut back assistance. Before the U.S.-led invasion of Iraq, Jordan used to buy all its needs of crude oil and products from Baghdad at undisclosed concession prices.
Iraq agreed last year to resume crude oil exports to Jordan at preferential prices but lack of security in Iraq has so far prevented that from happening.