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Abboud: Sin taxes could pay wage hike

File - A worker harvests cannabis plants at a field in Bouday, Wednesday, July 31, 2013. (The Daily Star/Mohammad Azakir)

BEIRUT: Former Tourism Minister Fadi Abboud weighed in Thursday on the public sector salary scale debate, suggesting a litany of potential revenue sources, including two controversial proposals: legalizing prostitution and marijuana.

Abboud called for levying high taxes on the prostitution industry and subjecting it to state regulation.

“Whether we like or not, prostitution in Lebanon is thriving. But legalizing it will allow the state to monitor prostitution in order to prevent abuse and exploitation and to guarantee compliance with health conditions,” Abboud argued. “We should guarantee this business will not turn into human trafficking and the exploitation of minors, as is the case now.”

Abboud suggested that the state could grant licenses for brothels, as Germany has, to control prostitution and remove the role of the pimps.

However, observers don’t believe that such a recommendation would be considered by the Cabinet or Parliament due to the conservative nature of the country.

Parliament has been debating a wide range of proposals to fund higher wages for government employees and public school teachers. Some of these proposals, such as raising the VAT from 10 to 12 percent, have angered the private sector.

But Abboud rejected the proposals to raise existing taxes, saying the state should broaden the tax base.

“It is illogical to discuss raising the VAT before collecting the full revenues from other sectors,” Abboud said. “According to the World Bank, 40 percent of economic activity in Lebanon is not subject to taxes.”

Abboud also suggested that the state legalize and regulate marijuana cultivation for medical purposes and export.

“All attempts to control marijuana growing have failed, and all attempts to find alternative crops have also failed,” Abboud said. “But if we legalize this activity in a proper way, then this would secure income for the state. We should note that the use of marijuana and hashish have become legal in several countries.”

Lebanon has tried to eradicate marijuana cultivation in the Bekaa Valley, to limited success as farmers have rallied to stop bulldozers from destroying their crops.

Successive governments and international organizations were not successful in finding alternative crops to marijuana.

Abboud also proposed imposing high fees on weapons licenses and organizing the import of personal arms and ammunition.

The former minister called for the government to end monopolies in several sectors and to allow open competition in the market.

In addition to creating competition in the telecommunications sector, ending Casino du Liban’s exclusive gaming license and privatizing the electricity industry, Abboud called for the creation of independent airlines to compete with Middle East Airlines.

“The state should stop protecting exclusive dealers in line with the free trade agreements that Lebanon has signed with other countries,” Abboud said.

 
A version of this article appeared in the print edition of The Daily Star on April 12, 2014, on page 4.

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Summary

BEIRUT: Former Tourism Minister Fadi Abboud weighed in Thursday on the public sector salary scale debate, suggesting a litany of potential revenue sources, including two controversial proposals: legalizing prostitution and marijuana.

Abboud called for levying high taxes on the prostitution industry and subjecting it to state regulation.

Abboud rejected the proposals to raise existing taxes, saying the state should broaden the tax base.

Abboud also suggested that the state legalize and regulate marijuana cultivation for medical purposes and export.

In addition to creating competition in the telecommunications sector, ending Casino du Liban's exclusive gaming license and privatizing the electricity industry, Abboud called for the creation of independent airlines to compete with Middle East Airlines.


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