Trade minister says Lebanese cabinet close to passing budget
The Cabinet is edging closer to endorsing an amended 2012 draft budget after a constructive debate among the ministers Tuesday, Economy and Trade Minister Nicolas Nahhas told The Daily Star.
“We hope to conclude all the discussions on the draft budget on Wednesday or Thursday at the latest. All indications show that the bill will pass without any hindrance,” Nahhas added.
As expected, the draft budget will not include any new taxes, but it may call for fees on certain items such as tobacco, cigarettes and alcoholic beverages.
Finance Minister Mohammad Safadi did not take part in the Cabinet meeting Wednesday, but ministers assured that Prime Minister Najib Mikati has the power to discuss the bill even if the minister responsible for the file is absent.
Sources also said that Mikati did not include any allocations for the Special Tribunal for Lebanon.
However, the prime minister is likely to pay the country’s share of the tribunal costs without passing a proposal to do so through the Cabinet or Parliament, the sources added.
Nahhas said that the discussions among the ministers were smooth and none of them had major reservations about the budget.
However, the budget will need the approval of the Parliament even if the Cabinet passes it.
Sources close to the Cabinet believe the bill will surely be endorsed by the Parliament as all MPs affiliated with PSP leader Walid Jumblatt will likely give it their seal of approval.
Nahhas declined to say what the projected budget deficit will be in the bill.
Sources told The Daily Star that the projected deficit in the new bill would not exceed LL5.4 trillion.
Nahhas said that there won’t be any problem financing some of the electricity projects which were called for by Energy Minister Gebran Bassil, noting that the previous government had made all the necessary allocations for these proposals.
If passed, Lebanon would have its first official budget since 2005.
But the bill will likely come under harsh criticism from March 14 parties, economists and even ratings agencies, because the draft budget did not call for real reforms to fix the fiscal deficit and cut swelling public debt.
In February, Safadi made important amendments to his original 2012 draft budget, reducing his proposed VAT tax from 12 to 11 percent and proposing higher taxes on property profits. But Safadi admitted that more was needed to reduce the projected budget deficit.
The minister also revealed that the proposed new budget would stand at LL21 trillion, while the budget deficit would reach LL5.3 trillion.
“With all of the taxes proposed, the budget is set at LL21 trillion and this includes an additional LL1.5 trillion to cover the increase in salaries for government employees, civil servants and army and security personnel,” he said.
Safadi said the cost of debt servicing in 2012 would reach LL5.3 trillion, salaries and benefits for government employees would stand at LL7.2 trillion and the electricity deficit at LL3.1 trillion, bringing the total spending to LL15.6 trillion.
- Why India is likely to re-emerge as the UAE's top trade partner
- What's really attracting high net worth individuals to living in the UAE?
- Forbes Middle East reveals names region's 200 most powerful women
- Presidential vacuum, Syrian crisis leaves Lebanon's business leaders more than worried
- Oil wells, taxes, and scare tactics: how the IS has been making money all this time
- Lebanon: Budget deficit reaches 31 percent in 2013
- Lebanon’s budget deficit rises to 25.47 percent
- Lebanon’s budget deficit falls by $572 million in first 10 months
- Lebanon’s budget deficit to rise to drastic levels
- Next government, inshallah! Lebanese parliament to keep procrastinating on salary scale?