The Lebanese cabinet will review at Thursday’s meeting a draft law to introduce a 10 percent value-added tax (VAT), reports said.
According to the Daily Star, the VAT, which is levied on the value added to a product at each stage of the manufacturing process, including the point of purchase by the consumer, is intended to raise new revenues for the finance ministry after the wide-ranging cuts in import tariffs late last year.
According to the paper, the proposed introduction of VAT comes as Lebanon is struggling with a severe economic recession and tense political debate. Some economists and businesspeople question the wisdom of applying the VAT, while most businesses are complaining of a drop in sales and profits.
Roy Badaro, a businessman and member of the Beirut Chamber of Commerce, was quoted by the daily as saying that “VAT would not yield the desired results amid this recession,” noting that the government had not explained whether the VAT would be added to the existing customs duties.
Officials, said the Daily Star, hope that the VAT will come into effect in 2002, after Lebanon signs an association agreement with the European Union, a move that Lebanese and EU officials hope will happen in the middle of this year.
The 29-page draft law prepared by the ministry proposes that the VAT be applied to any business in Lebanon that generates a gross revenue of more than LL500 million (US$333,000) a year – Albawaba.com
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