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Lebanon: Fears of Arbitrary Rise In Prices After Increase In Import Duties

Lebanon: Fears of Arbitrary Rise In Prices After Increase In Import Duties

Tuesday, 23 July, 2019 - 12:15
FILE PHOTO: A tourist uses an iPad to take a picture of fellow tourists at the sea castle in the port city of Sidon, Lebanon July 9, 2019. REUTERS/Ali Hashisho
Beirut - Caroline Akoum
Lebanon’s decision to increase customs duties on imported goods in the budget of 2019 increased citizens’ fears of a random rise in prices without control and accountability.

The political and economic opinions were divided over this matter. Some deputies expressed their rejection during the discussion of the budget last week, while Economist Jassim Ajaka said that this measure was good and might reflect positively on the economy.

The increase of customs duties includes imported goods subject to VAT, excluding gasoline and raw materials for industry and agriculture. Around 55 percent of the goods imported by Lebanon are expected to be affected by the new measure.

The Ministry of Economy is about to issue a list of the concerned products, the most important of which are electronics, cars, clothing and some consumables, which are estimated at $12 billion out of total imports amounting to $20 billion annually.

Amid fears of the arbitrary rise of prices as a result of the new measures, Economy Minister Mansour Bteish said that the 3 percent fee would only affect 50 percent of the imports.

Emphasizing that his ministry would protect the citizens’ interests, the minister noted that the rise of duties would increase the treasury revenues by $350-360 million annually.

In remarks to Asharq Al-Awsat, Ajaka said he agreed with the government measures in light of the current economic situation and the exploitation of the Lebanese market for illegal smuggling and tax evasion.

But he questioned the success of the implementation of this plan, saying: “Our experience in Lebanon is not encouraging and we expect the failure of this step because the problem always remains in the non-application of the laws or the policy of selectivity in their application.”

In this regard, he underlined the need to impose tight control on the markets to ensure the traders’ compliance and to prevent them from randomly increase prices of all goods.

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