IMF Adnan Mazarei speaks during an interview with The Daily Star in Beirut, Wednesday, May 13, 2015. (The Daily Star/Hasan Shaaban)
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The government needs to consider increasing the value added tax by 1 to 2 percentage points, cut electricity subsidies and invest more on infrastructure to achieve higher economic growth, a senior official at the International Monetary Fund said Wednesday.Mazarei said he proposed to Finance Minister Ali Hasan Khalil that the government reduce the subsidies on the state-owned power company Electricite du Liban in order to rein in the huge deficit in the electricity sector.The IMF view was also supported by the World Bank, which warned that EDL's deficit is stifling growth in Lebanon."We also suggest raising the VAT tax as a quick measure to increase revenues and this increase can range between 1 or 2 percentage points," Mazarei said.He stressed that Lebanon needs large revenues to reduce the enormous deficit and public debt. Mazarei said it was up to the government to add the salary scale to the bill and the IMF had no opinion on this matter.Mazarei argued that the electricity subsidies are benefiting the rich and wealthy people in Lebanon and not the poor.
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