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For decentralization in Lebanon to succeed, elected local officials endowed with wide prerogatives must have adequate fiscal resources to provide services and development.Nevertheless, revenues generated from local taxes are rarely sufficient to undertake development.Relying too much on such transfers, however, makes sub-national governments fiscally dependent on the central government and hence undermines decentralization.Second, it promotes fiscal autonomy by basing a significant portion of these revenues on direct local taxes and fees.Although the draft law identifies six types of revenues, the three major sources that will finance spending are the direct taxes and direct fees administered by the qada as well as the intergovernmental transfers.In order to augment the resources of the fund itself, the draft law requires that it be financed by taxes and fees that provide reliable and significant revenues. These include 25 percent of the total VAT revenues collected by the central government, 10 percent of the total mobile phone bills, 25 percent of the total custom revenues and 25 percent of the inheritance fees, among others.
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