Lebanon: Inflation Fears after Government Decides to Impose Import Tax
Lebanese politicians and industrialists welcomed the government’s decision to impose a two percent import tax, arguing such measure would back the local industry.
However, some experts expressed belief that imposing taxes “randomly” in the absence of a clear economic plan, could fail to achieve the desired objectives of the government.
Importers of food products called on the government to review its decision, warning that such taxes would lead to inflation.
Food import companies warned they risked closure.
The Lebanese cabinet had met almost on a daily basis to debate the 2019 draft budget that aims to avert a financial crisis by cutting public spending and reduce a ballooning deficit.
Ministers have said the proposed measures include tax increases, including a 2 percent tax on imports such as refined oil products, but excludes medicine, environment-friendly cars and primary equipment for agriculture and industry.
Minister of Economy and Trade Mansour Bteish announced that the Cabinet has also decided to impose additional tax on 20 imported products that are entering the country in large amounts at prices lower than the local production cost, including flour, dairy products, detergents, furniture, leather shoes, clothes, and wafers and biscuits.
Several experts considered the new measures as the first steps in moving Lebanon, which is dependent on tourism, banks and real estate, into becoming an industrial country.
Former Economy Minister Raed Khoury told Asharq Al-Awsat that the import tax would help boost local production, limit imports which would ease the deficit and bring in more revenues to the treasury.
Fadi Gemayel, Chairman of the Association of Industrialists, also said that the taxes on imported products will have a positive impact on the industrial sector.