Lebanon opts for sales tax, abandons VAT
Lebanon plans to introduce a sales tax on consumer products and not value added tax (VAT), as had been planned by the previous government, Prime Minister Rafiq Hariri said Wednesday. "We are planning, this year if possible, to introduce the system of sales tax. For our country it is easier, less complicated than VAT," he said during an interview with AFP.
The plan to introduce VAT had been developed by the former government of Salim Hoss (1998-2000). "Our services are counting on the progressive application of this tax, which will be for example two percent in the first year. The following three years, it will rise by one percent per year, until it reaches five percent, which will be the final tax.”
Hariri confirmed that the main objective of his government was to reform the social security system, with the consumer tax introduction coming just afterwards.
The daily Al-Mustaqbal newspaper — which Hariri owns — revealed Wednesday that the government was studying a reform of the social security system in two stages: first a rearrangement of payments by employees and bosses, then the introduction of a retirement system.
Since his return to the post of prime minister in October, Hariri has stepped up economic measures, in particular deciding on a sharp drop in customs duties. — (AFP, Beirut)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)