Lebanon News

Cabinet meets as backlash grows over tax proposals

A Cabinet session headed by Prime Minister Saad Hariri at the Grand Serail, Oct. 17, 2019. Industry Minister Wael Abu Faour and Education Minister Akram Chehayeb stand behind Hariri. (The Daily Star/Hasan Shaaban)

BEIRUT: Cabinet discussed a 36-item agenda Thursday in a session headed by Prime Minister Saad Hariri.

The meeting comes as ministers face backlash over a series of government proposals to increase taxes and impose fees in the draft 2020 state budget.

Speaking after the session Information Minister Jamal Jarrah said that "most" of the items were agreed on. He added that the draft 2020 state budget would be discussed in a session at 2 p.m. Friday.

Before entering Thursday's session, Jarrah said a proposal was being discussed to raise the value added tax (VAT) by 2 percentage points in 2021 and an additional 2 percentage points in 2022 to reach 15 percent “like most world countries.”

The average global rate for indirect taxes, of which VAT is one kind, is 15.4 percent, according to KPMG, an auditor.

Jarrah and Telecommunications Minister Mohamed Choucair also confirmed media reports that the government will impose $0.20 on calls made through VoIP (Voice over Internet Protocol), which is used by applications such as WhatsApp, Facebook, FaceTime and others.

"The decision was taken at yesterday's [Wednesday] Cabinet session," Jarrah told reporters after the session.

Youth and Sports Minister Mohammad Fneish said he and other Hezbollah ministers opposed the “WhatsApp call fee and we said more than once that we are against imposing taxes on people, and the VAT tax must be imposed on luxuries.”

In Wednesday’s Cabinet session, ministers endorsed a raft of decrees, decisions and reforms, as well as other measures to increase the state’s revenues and cut costs, Jarrah announced after the session.

These include a decision issued by the Finance Ministry to levy a new fee on tobacco products, both local and imported, and a decision to place more scanners at border crossings in order to crack down on smuggling.

 

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