Le­banon okays tax law to fi­nance pay rise

Khaleej Times - - MIDDLE EAST - Reuters

beirut — The Le­banese gov­ern­ment ap­proved a new tax law on Fri­day to fund a pub­lic sec­tor pay rise, Prime Min­is­ter Saad Al Hariri said, sig­nalling an end to a cri­sis that led many work­ers to go on strike.

The con­sti­tu­tional coun­cil, a branch of the ju­di­ciary, last week an­nulled an ear­lier ver­sion of the tax law that was de­signed to raise the rev­enues needed to fi­nance the pay in­crease, which comes into ef­fect in a few days’ time.

“We have reached a re­fined law that in­cludes the nec­es­sary tax amend­ments,” Hariri said af­ter a cabi­net ses­sion.

The cabi­net plan must now be re­ferred to par­lia­ment be­fore it can be­come law.

The par­lia­ment swiftly ap­proved

We have reached a re­fined law that in­cludes the nec­es­sary tax amend­ments Saad Al Hariri, Le­banese PM

the ear­lier ver­sion of the law be­fore the con­sti­tu­tional coun­cil struck it down.

Prime Min­iste Hariri’s gov­ern­ment in March agreed the first state bud­get in 12 years, but that has yet to be ap­proved by par­lia­ment.

Some Le­banese economists and busi­nesses have crit­i­cised the higher pay rate and taxes, which rep­re­sent one of the most sig­nif­i­cant de­ci­sions of the coali­tion gov­ern­ment ap­pointed in De­cem­ber af­ter years of po­lit­i­cal paral­y­sis.

The con­sti­tu­tional coun­cil had found the tax hikes to be un­law­ful for rea­sons in­clud­ing the gov­ern­ment’s fail­ure to ap­prove them as part of a bud­get.

Le­banon has a debt-to-GDP ra­tio of 148 per cent, among the high­est in the world, and the fi­nance min­is­ter has pre­vi­ously es­ti­mated that the pay rise would cost $917 mil­lion.

The pro­posed hikes in­cluded in­creases in value-added tax, cor­po­rate tax, levies on al­co­hol and to­bacco, lot­tery prizes and in­ter­est on bank de­posits, as well as in­creases in fees and fines. —


Prime Min­is­ter Saad Al Hariri pre­sides a cabi­net meet­ing at the gov­ern­men­tal palace in Beirut on Fri­day. —

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