BEIRUT: Head of the Lebanese Industrialists Association Tuesday called on the government to speed up the reimbursement of VAT proceeds collected from manufacturers, warning that the delay in doing so is a form of taxation of the industrial sector.

Speaking at joint news conference with Industry Minister Vreij Sabounjian, Nehme Frem said the law stipulates that the Finance Ministry should repay the value added tax collected on Lebanese industrial products during a certain period.

Frem also warned against scrapping Article 59, a law which allows industrialists to restore the VAT levied on mineral materials and industrial machines.

Former Finance Minister Raya al-Hasan has proposed canceling this article but the idea was widely rejected by industrial companies in Lebanon.

Frem also raised the issue of the high cost of production which has negatively affected the industrial sector.

He added that the prices of red gasoil rose by more than 25 percent from 2009 to 2010, taking a heavy toll on the industrialists because they count heavily on this substance to produce goods.

“I urge the government to form the National Fund for the Subsidizing Energy [red and green gasoil] to help the Lebanese industrialists cope with the surge of oil in the international markets,” Frem said.

He criticized the Agriculture Ministry for compelling manufacturers of cheese and yogurt to buy fresh milk from Lebanese farmers at a certain price, adding that this measure hurts demand for dairy products.

“This action has raised the cost of production of cheese and yogurt by 15 percent and this will directly affect the Lebanese consumer,” Frem explained.

Echoing similar views, Sabounjian stressed that the Lebanese industrialists need the help of the government.

He proposed cutting the VAT and fees on all industrial research, giving the industrialists more time to offer information on their suppliers, reducing income tax on industrial exports and not canceling article 59 on the VAT.