Anger flamed across Lebanon as lawmakers
approved five new taxes on Wednesday, including increasing the VAT from
10 per cent to 11 per cent. The tax increases come in the latest wave
of austerity measures to offer public sector workers – including police
officers and teachers – new salary packages. Tax payers held protests across the
country, angered by the measures and calling for the government to
tackle corruption within the political system to fund development rather
than increase excises. Another large-scale protest is due to take place in Beirut tomorrow.
Some 6,000 people are expected to join the march which is organised by the Lebanese Communist Party. The political group is calling on the
government to “escalate social spending on health, education and
development, wages and create jobs.” “We are protesting in rejection of
unfair tax policies that pull money out of the pockets of the poor to
finance waste and theft and corruption of power.”
by Gulfnews – Beirut: A series of tax hikes recently passed in parliament has
triggered street protests by citizens frustrated with moves as the
country is in the throes of crippling economic stagnation. Legislation
has been practically dormant in the past two years when Lebanon was
without a president due to regional circumstances. But last year,
when Lebanon finally agreed to elect Michel Aoun to head the country,
citizens were a bit more hopeful that at least basic pending matters
such as salary increases for teachers, civil servants and the military
could be finally adjusted. But with the country suffering from a
lack of tourism from Gulf states due to the pro-Syrian and pro-Iranian
stances of some of its politicians, Lebanon is struggling to come up
with the funds. Around 2,000 protesters turned up outside of
parliament Friday night to warn politicans against impoverishing
citizens and promised to protest again on Sunday.
The demonstrators hailed from various civil society and political
groups including the Progessive Socialist Party of Druze leader Walid
Junblatt, the mainly-Maronite Phalange party headed by Sami Gemayel and
the National Liberal Party headed by Dory Chamoun, the son Camille
Chamoun who served as Lebanese president between 1952 and 1958.
Neamat
Badreddine of the “We Want Accountability” campaign says the protests
are intended to protect the middle class from having to foot the bill.
They
accuse ‘corrupt’ politicians of squandering public funds by giving some
financial exemptions to people in exchange for political support or
based on sectarian preferences.
It is widely known that members of
the Iran-backed Shiite Hezbollah group are the only ones exempt from
paying duties at the airport and harbour.
Shiite Parliament
Speaker Nabih Berri is known to give his Amal party supporters huge
electricity subsidies to the tune of $2b a year.
As Lebanon
continues to grapple over ways to balance country’s ballooning budget
deficit, the parliament approved one per cent increase (from 10 to 11
per cent) in VAT on Wednesday, along with five other taxes, including
levies on financial transactions, along with a 6,000 Lebanese pounds
($4) tax on the production of each ton of cement. On Friday, three more
taxes were passed.
Proponents of the tax hikes say these steps are
necessary to fund long-stalled new pay scales for government employees
which include judges, teachers and military personnel.
The hikes in taxes were opposed by the Phalange and Future parties, which belong to the anti-Syrian March 14 coalition bloc.
Gemayel,
said that instead of tackling corruption the government is targeting
the citizens’ pockets. He said that such steps will destroy the
country’s economy and impoverish the people.”
He warned such moves could spark a “revolution” in the country.
In
a bid to calm protests, Prime Minister Sa‘ad Hariri promised there
would be no new taxes and that the slated salary adjustments would be
soon approved.
He also squashed what he called “rumours” that the
government planned on introducing new taxes on bread, gas and other
basic items.
He said the priority for his government was now to
pass the draft budget for 2017. Lebanon has not had a budget since 2005
due to political paralysis.
According to preliminary figures made
public ahead of the proposed 2017 budget, the deficit could top US$4
billion, which would be added to the $74 billion public debt burden.
In
testy exchanges with reporters, and responding to calls by some
lawmakers, labor union leaders and independent economists all of whom
recommended that Beirut generate fresh revenues by curbing tax evasion
and halting the squandering of public funds, Hariri opined that his
government intended “to restore confidence because we want to build this
relationship with the Lebanese on a clear basis”.
