Lebanon – 71 MPs Vote in Favor of Revised Tax Law, 5 Against as 9 Abstain

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Lebanese feed pigeons near the four–faced Rolex clock tower at the Parliament square, in downtown Beirut, Lebanon, Wednesday, May 13, 2015. Not even tourists can set foot anywhere in the area during the twice-monthly lockdowns as lawmakers meet. On Wednesday, for the twenty-third time in a row, they failed to elect a president. (AP Photo/Bilal Hussein)

The Lebanese parliament on Monday approved a revised tax law to fund a new wage scale for civil servants after a previous law was revoked by the Constitutional Council over procedural and financial violations, as a separate bill on suspending the wage scale was referred to the Parliamentary Finance Committee.

Seventy-one MPs voted in favor of the law, the five MPs of the Kataeb Party voted against it, as nine other lawmakers abstained from voting, most of them from Hizbullah’s Loyalty to Resistance bloc.

The taxes approved in the morning session included hiking VAT from 10 to 11%; hiking the prices of financial stamps; hiking taxes on imported alcoholic beverages; hiking fees charged by notaries; LBP 2,500 on landline phone bills and LBP 250 on mobile phone recharge cards; LBP 6,000 on cement production; LBP 250 on every cigarette pack, a 10% increase on every cigar and LBP 2,500 on every kilogram of hookah tobacco; an LBP 5,000 fee on non-Lebanese travelers entering Lebanon by land; an LBP 50,000 tax on economy class travel tickets, LBP 150,000 on first class travel tickets and LBP 400,000 on every traveler on a private jet.

In the evening, the legislature approved taxes on imported containers, annual fines on seaside properties, a tax hike on lottery prizes, additional fees on firms’ income tax and fees on real state sale contracts as it hiked taxes on the profits of financial firms from 15% to 17% and taxes on banks’ interests and revenues from 5% to 7%.

Announcing that he had referred the bill on freezing the wage scale to the Finance Committee, Speaker Nabih Berri warned that “if we don’t approve the taxes, Lebanon’s credit rating will drop which would negatively reflect on our currency.”

“We must finalize the state budget before the end of the month and we must verify the presence of a budget surplus,” he added.

During the session, Finance Minister Ali Hassan Khalil noted that “the real objective behind the taxing measures is to reduce the deficit regardless of the wage scale.”

“Everyone criticizing the taxing measures has contributed to hiking expenditure… The public debt interest increased LBP 760 billion in one year,” Khalil added.

Earlier during the session, the head of the Finance Committee, MP Ibrahim Kanaan, had called for suspending the VAT hike until the state budget is approved, noting that it can be shelved along with other taxes in light of the achieved surplus.

 

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