Proper Steps for Reducing the Lebanese Budget Deficit

In an intervention during a discussion hosted by FES Lebanon in partnership with the Independent syndicate movement, Economist Dr. Kamal Hamdan specified the following 11 suggestions that should be applied to reduce the national budget deficit without touching the workers acquired rights:

1.The adoption of a unified tax on the total sources of income of taxpayer, applied progressively with increasing income

2. Increasing the tax rates on the profits of the loaning and funding companies while adopting the progressive tax therein

3.(Up until the unified tax is applied to all the sources of income): Emphasis is placed on increasing interest tax, in light of the concentration of capital and the control exerted by a small number of senior depositors on bank deposits (1% of depositors hold about 55%)

4. Restructuring public institutions, developing, merging, canceling or adjoining preexisting ones to the concerned ministries

5. Radical review of tax exemptions, including exemptions for waqfs and religious institutions

6. Increasing the tax on luxury consumer goods (possibly through the adoption of two VAT rates)

7. preserving the recently adopted salary scale while leaving the acquired rights of the employees untouched

8. Abolishing funds outside the direct control of ministries such as the Fund for the Displaced and the Council of the South

9. Canceling free private education

10. Abolishing education subsidies to employees in the public sector

11. A radical revision of social welfare policies to effectively serve disadvantaged social groups

Download the Arabic version of these recommendations here