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French Pressure Pushes Lebanon to Combat Tax Evasion

French Pressure Pushes Lebanon to Combat Tax Evasion

Sunday, 15 September, 2019 - 11:00
A general view of Beirut, Lebanon. (Reuters)

During a recent visit, the French envoy in charge of following up the decisions of the CEDRE Conference urged Lebanon to put an end to tax and customs evasion, as a necessary measure to stop state budget squandering.

Ambassador Pierre Dukan also called for other reform measures, most notably the implementation of the 2019 budget, the adoption of the 2020 budget within the constitutional deadlines, the reduction of spending and the implementation of the electricity plan.

Dukan drew up a roadmap for the Lebanese state, starting with the assertion that extracting gas and oil was not a “magic remedy” that will change the situation for the better, which prompted the government to prove its willingness to apply the reforms pledged during the CEDRE Conference, beginning with the tax and customs evasion file.

Customs evasion is a major sign of corruption that eats away at the state's revenues and takes many forms, including legalized smuggling, through the reduced or falsified bill of consumer goods entering Lebanon in large quantities through the port or airport.

In remarks to Asharq Al-Awsat, former minister Fadi Abboud noted that the state loses more than $500 million a year in tax evasion.

As for customs evasion through illegal crossings, it amounts to $5 billion, depriving Lebanon of revenues exceeding one billion dollars, divided between customs duties and VAT.

According to the World Bank, more than 40 percent of sales and purchase operations are made without VAT.

Lebanon’s GDP is estimated at $60 billion, and the tax rate on profits is at least 10 percent among individuals, institutions and companies.

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