A value added tax (VAT) is to be adopted by Lebanon for the first time, starting next year. The Lebanese cabinet approved the new tax law on June 6, adding a ten percent levy on a wide range of products, reported Al-Hayat.
The Lebanese Minister of Treasury Fuad Siniora stated that despite general public skepticism towards the new imposition, the 10 percent tax is considered a rather low rate for VAT, compared with 20 percent rates customary in other countries.
The new measure is expected to offset the country’s annual budget deficits and its $24 billion public debt. The tax is furthermore considered necessary to compensate for lower state revenues following recent privatization moves and the import tariff reduction late last year, which cut into the single largest source of income for the Lebanese government until now.
The adoption of a VAT is a precondition to joining the World Trade Organization and to finalizing the much-desired partnership agreement with the European Union. The move is therefore considered part of Lebanon’s efforts to move towards a more globalized economy. –(MENA Report)
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