Industry Minister Hussein Hajj Hasan called for quick implementation of incentive measures for industrialists in a bid to improve the sector’s competitiveness in the region and worldwide. “It is time to start with the implementation of incentives, which includes the modification of Item 17 of the VAT law by exempting industrialists from the tax on raw materials and imported industrial equipment,” he said.
Hajj Hasan’s remarks came during a conference held at the Lebanese University in Hadath on the occasion of the national day of Lebanon’s industry.
He emphasized the need to exempt industrial research from taxes, in addition to implementing the law that exempts industrialists from 50 percent of the income tax on industrial exports.
He also cited other necessary measures that would improve the sector, which include strengthening local consumption of Lebanese-manufactured products and creating industrial zones to encourage increased production at a lower cost.
“The volume of our production is too low when compared to countries such as China, for instance,” he said.
Hajj Hasan said that the government must modify some agreements with its trade partners in a bid to provide Lebanon with a competitive edge when it comes to industrial exports.
“We are not in a state of war with anyone when it comes to exporting our industrial produce, but we are eager to modify some trade agreements that are impacting our industry sector in a negative way,” the minister said.
He explained that as a result of such trade agreements, Lebanese pharmaceutical companies for instance cannot register their drugs in other Arab countries while these countries can easily register their own in Lebanon.
“We do not understand why we cannot register our drugs in other countries although our products are totally compliant with international standards,” he said.
Hajj Hasan said that these trade agreements weighed negatively on industrial exports while imports have increased.
His comments were echoed by Rabih Badran, head of the industrial statistics department at the Industry Ministry, who said one of the reasons behind the drop in exports was due to the fact that a large chunk of these goods have been sold to Syrian refugees in Lebanon.
Lebanese industrial exports dropped from $3.567 billion in 2012 to $3.384 billion in 2013 and $3.150 billion in 2014, according to Badran’s statistics.
He added that trade deficit went up from $16.8 billion in 2012 to $17.2 billion in 2014.
“Our industrial exports dropped by 6.9 percent between 2013 and 2014 due to the war in neighboring Syria, which used to import a big part of our products,” said Fadi Gemayel, president of the Association of Lebanese Industrialists.
Gemayel urged the government to provide financial support to industrialists by paying for the export of products to Arab countries by sea following the closure of the Nasib border crossing between Syria and Jordan.
“We are in dire need of the government’s support in order to not lose our export markets, especially the Gulf region, which imports 33 percent of our products, in addition to Iraq with a market share of 10 percent,” he said.
Meanwhile, Dany Gedeon, director-general of the Industry Ministry, made a presentation about an integrated vision for the Lebanese industrial sector in 2025.
Gedeon said that the vision includes enhancing the referential reliability of the Industry Ministry in the field of industrial statistics and information.
The new vision also aims at increasing the contribution of the industrial sector to Lebanon’s GDP to 18 percent and improving the productive capacity so it can meet 50 or 60 percent of the consumption needs of the local market.
“We also plan to establish a new building for the Industry Ministry headquarters and new locations for its regional departments that are capable of accommodating the ministry staff and related institutions,” he said, adding that the ministry will keep pace with developments in addition to supporting researches and innovations.
By Dana Halawi
