Lebanon: Merchants hike prices ahead of new taxes

Published March 19th, 2017 - 09:00 GMT
Traders across Lebanon increased their prices although the debate over the new taxes has not been concluded yet. (File photo)
Traders across Lebanon increased their prices although the debate over the new taxes has not been concluded yet. (File photo)

Many merchants rushed to change the price labels of certain commodities upward even before the implementation of proposed taxes by the government.

Economy Minister Raed Khoury admitted that traders across Lebanon seized the opportunity to increase the prices, although the debate over the proposed taxes to finance the salary scale in Parliament has not been concluded yet.

Khoury warned traders against raising prices in an attempt to exploit the fuss over the new taxes that are expected to be imposed if the new wage scale is endorsed by Parliament.

“Several shops have raised the prices without any justification,” Khoury said in a statement issued by his press office.

It called on vendors to abide by the law, and noted that the Directorate of Consumer Protection Friday issued a number of fines against violators.

The statement warned that the ministry would take strict measures against monopolies and any attempt to raise prices without justification.

Traders and vendors in Lebanon began raising prices on items after Parliament began discussing proposed taxes to fund the new salary hike for civil servants and public and private teachers.

Independent consumer protection groups said they received hundreds of complaints about unjustified price hikes by grocery shops and small supermarkets.

“I have been receiving dozens of phone calls today from citizens who complained a sudden rise in the prices of specific commodities such as rice, sugar and canned food items. They also raised the price of a pack cigarettes by LL250 [$0.17] although Parliament has not yet endorsed this proposal. [They] are greedy and unethical merchants who can’t wait to make a quick profit,” Zuhair Berro, the head of Consumer Lebanon, told The Daily Star.

He added that the additional prices slapped on the commodities would end up in the pockets of the merchants and not the government.

Berro explained that Consumer Lebanon is conducting a comprehensive survey in to determine the size of violations, adding that the results will be published very soon.

He ridiculed the argument of the Economy Ministry that it does not have sufficient number of controllers to monitor the prices of commodities all over Lebanon.

“This argument is absurd. The Economy Ministry has 140 controllers while Dubai has only 22. But in Dubai the number of violations recorded by the emirate was 17,000 and in Lebanon the number of fines only reached 170 in one year. This shows that these employees are not doing their jobs properly. They want go get paid for doing nothing,” Berro complained.

There were also reports that the prices of imported whiskey and other alcoholic beverages soared suddenly although the decision to increase them have not been enforced yet.

However, most known supermarkets kept the prices of most consumer products unchanged.

“As a matter of fact, some of the supermarkets are making good offers on many items. I haven’t noticed any change in the prices of coffee and cereal products,” one housewife told the paper.

Mohammed Choucair, the head of Chambers of Commerce, said respectable merchants and businesses would not tarnish their image by hiking prices unless the government and Parliament officially approve the taxes.

“Most leading supermarkets have no interest in raising the prices at the moment. But if the value-added tax was increased, then these supermarkets will have to alter the prices,” Choucair said.

The government plans to increase the VAT from 10 to 11 percent, a measure which is supposed to generate revenue of $200 million annually to the Treasury.

By Osama Habib

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