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Khalil vows municipalities will get telecoms revenues

Minister Ali Hasan Khalil speaks during a news conference in Beirut, Friday, Aug. 29, 2014. (The Daily Star/Mahmoud Kheir)

BEIRUT: Lebanon’s Finance Minister pledged Friday to transfer the municipalities’ share of telecom revenues due since 2010, while casting doubt over the fate of millions in funds that should have been reserved and transferred to municipalities since 1994.

“The accumulated revenues for the municipalities now stand at LL673 billion [$445 million] from the start of 2010 to the end of March 2014,” Finance Minister Ali Hasan Khalil told reporters in a news conference at his ministry.

“From 2003 to 2009, the revenues were estimated at LL685 billion. This amount was apparently transferred as telecoms revenues to the Finance Ministry and not designated to the municipalities,” he added.

Khalil said that the Finance Ministry had no records whatsoever of telecom revenues that should have been allocated to municipalities from 1994, when Lebanon started operating mobile networks, until 2002.

He said that the amount had most likely been transferred to the state treasury, and that probably no one had taken into account the share of municipalities or designated the amount of funds reserved for them.

While 10 percent of the government’s mobile telecoms revenue is designated to go to municipalities, local municipal officials have complained for years that they aren’t receiving the full amount. Successive telecoms and finance ministers have traded blame in recent years, and several Cabinet decrees have been issued to release the funds.

“We are committed to distributing the accumulating funds to the municipalities, and we will continue demanding answers and seeking accountability from those who neglected to grant the municipalities their lawful rights,” Khalil said.

“The municipalities should be confident that we, as politicians and officials in the government, will secure your right to access the funds.”

The minister said despite repeatedly requesting that the Telecoms Ministry provide the Finance Ministry with a detailed assessment about the revenues designated for the municipalities, he only received a report in July 2014.

He said the government was now indebted to municipalities, due to the failures of previous ministries to assume their responsibilities. Khalil added that the Finance Ministry had drafted a decree to distribute the funds to municipalities, in cooperation with the Interior Ministry.

He said that in the absence of a census, the allocation of funds to each municipality would be based on the number of registered residents, and, to a lesser extent, the number of land-line phone subscribers.

Khalil said his ministry would automatically deduct funds owed by municipalities for garbage collection before distributing the municipalities’ share of the revenues.

Telecoms revenue is the third-largest source of income for the cash-strapped treasury after customs and VAT.

Net telecoms revenue is usually between $1.2 and $1.4 billion a year.

Lebanon’s state-owned mobile networks operated by private companies touch and Alfa have 2.1 million and 1.8 million subscribers respectively.

 
A version of this article appeared in the print edition of The Daily Star on August 30, 2014, on page 4.

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Summary

Lebanon's Finance Minister pledged Friday to transfer the municipalities' share of telecom revenues due since 2010, while casting doubt over the fate of millions in funds that should have been reserved and transferred to municipalities since 1994 .

Khalil said that the Finance Ministry had no records whatsoever of telecom revenues that should have been allocated to municipalities from 1994, when Lebanon started operating mobile networks, until 2002 .

He said that the amount had most likely been transferred to the state treasury, and that probably no one had taken into account the share of municipalities or designated the amount of funds reserved for them.

Khalil added that the Finance Ministry had drafted a decree to distribute the funds to municipalities, in cooperation with the Interior Ministry.

Khalil said his ministry would automatically deduct funds owed by municipalities for garbage collection before distributing the municipalities' share of the revenues.


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