Lebanon News

Aoun signs tax, salary scale laws

President Michel Aoun, 3rd right, receives Iranian Foreign Ministry spokesman Hussein Jaber Ansari, 3rd left, Iranian ambassador to Lebanon Mohammad Fathali, 2nd right, with a delegation in Baabda, Monday, Aug. 21, 2017. (The Daily Star/Dalati Nohra, HO)

BEIRUT: After a delay, President Michel Aoun Monday signed the salary scale and tax hike laws that will increase a number of taxes including a 1 percentage point rise in the value added tax. In a statement, the office of the presidency announced that Aoun had signed both laws and issued them based on constitutional guidelines. Parliament endorsed the laws last month during a two-day legislative session.

Had Aoun not signed the two bills by Thursday they would have been returned to Parliament for further deliberation.

The state-run National News Agency reported that the laws were added as a supplement to the already published Official Gazette, a rare move that is scarcely done on such short notice.

The laws had already been signed by Speaker Nabih Berri and Prime Minister Saad Hariri.

Berri has been one of the most ardent supporters of the bill and his chief aide Finance Minister Ali Hasan Khalil has maintained that the additional taxes would not impact poorer constituents.

In addition to the increase in VAT from 10 to 11 percent, the law will increase taxes on corporate profits, tax citizens’ bank deposits and increase tariffs on imported alcohol and tobacco.

Last Monday, the president chaired a roundtable economic conference at Baabda Palace in an attempt to bring together radically conflicting views on the bill. Most of the criticism centered on the proposed taxes that would fund the salary scale, which is estimated to cost some $800 million annually.

Khalil and Metn MP Ibrahim Kanaan from Aoun’s Free Patriotic Movement were tasked with introducing amendments to address what the president had described as “gaps” in the provisions relating to the new tax measures.

Bankers and business leaders who attended the Baabda Palace conference warned the beleaguered economy would further suffer if the new taxes were imposed.

However, a number of bankers contacted for comment on Aoun’s move Monday declined to speak about the development. Instead, they wished to wait until amendments were made before taking a public stance on the tax hikes and salary scale.

Following its weekly meeting, the Kataeb Party’s politburo released a statement expressing its “disappointment” that the president had signed the tax increase laws.

“[The taxes] will have disastrous consequences on the economic stability ... of those with limited incomes, beginning as of this week,” the statement said, adding that the party would appeal the tax increase law.

Parliament will be also be meeting for morning and evening sessions Tuesday and Wednesday, during which lawmakers will quiz the Cabinet on its performance over the past eight months. Among the most contentious issues that are expected to be deliberated is the controversial visit by three ministers to Syria, despite Lebanon’s declared disassociation policy.

Last week, Hezbollah, Amal Movement and Marada Movement MPs attended the Damascus International Fair and held talks with their Syrian counterparts to boost trade and economic ties between the two countries. Hariri said that the ministers were acting of their own accord and were not there in an official capacity.

The FPM’s politburo released a statement after their weekly meeting that tentatively supported the ministers’ trip to Syria.

“Nothing prevents the economy minister from conducting any form of communication with his Syrian counterpart to discuss mutual subjects that are for the benefit of Lebanon,” the FPM statement said.

Separately, the president met with Iran’s deputy foreign minister for Arab and African affairs, Hossein Jaberi Ansari.

Sources from Baabda Palace said that Aoun informed the visiting delegation he had accepted an invitation to visit Iran but the date for the trip had yet to be set, Hezbollah’s TV channel Al-Manar reported.

Jaberi Ansari, who arrived at Rafik Hariri International Airport at 7:30 a.m. Monday also held talks with Berri, Foreign Minister Gebran Bassil and Progressive Socialist Party leader Walid Jumblatt.

A Cabinet session will take place Thursday at the president’s summer residence in Beiteddine. The session is expected to be heated after the government dismissed two previous bids to lease power barges last Thursday. The move would have increased power supplies. Instead, the Cabinet called for a fresh round of tenders to be issued with new conditions.

A version of this article appeared in the print edition of The Daily Star on August 22, 2017, on page 2.




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