Lebanon's ministry of finance released on Monday, January 15, the draft 2001 budget, before being endorsed by Parliament. The budget forecasts total revenues of $3.25 billion and spending of $6.62 billion (of which $2.8 billion is in debt servicing) generating a deficit of 50.87 percent of total expenditures, compared to the 56.33 percent actually recorded in 2000.
The ministry projected a drop in customs duties’ revenues to $637 million in 2001 compared to $1,248 million last year, following a wide range of cuts in import duties last December aimed at stimulating economic growth. Revenues from income and corporate taxes were forecasted at $503 million, up 46.6 percent from 1999 figures.
The ministry declared its intention to obtain parliament’s approval for the issuance of up to $2 billion in new Eurobonds and another $1 billion in domestic Treasury bills to help finance the $23 billion public debt. The draft budget did not mention revenues expected from privatization of state assets or the introduction of value-added tax, which were supposed to contribute to government revenues under the budget plans of former Finance Minister Georges Corm.
In a snapshot of the government’s general philosophy on the budget, Trade and Economy Minister Bassel Fleihan was quoted as saying “High deficits can be sustained for several years. The importance would be to create the environment and conditions for growth to take-off and move forward with other reforms.” He added, without giving any time-frame, that the government intends to undertake tax reform, go-ahead with privatization,and update business laws. — ( Banque du Liban et d'Outre-Mer Sal )
© 2001 Mena Report (www.menareport.com )