What does Lebanon need to comply with international practice?

What does Lebanon need to comply with international practice?

September 28, 2023

RDCL President Mr. Nicolas Boukather & Treasurer and Board Member Mr. Nadim Daher participated in the panel discussion organized by FiWi-Financial Wise, in partnership with ‘L’Institut des Finances Basil Fuleihan’. The panel titled “What does Lebanon need to comply with international practice?” took place at Mövenpick Hotel, Beirut, in presence of representatives of the international community namely the IMF, the EU and the UNDP, in addition to many key figures in the finance sector and media representatives.

The event mainly aimed at discussing key issues of Lebanon tax system, the necessary measures & the right opportunities for reforms. It also tackled new tax instruments adopted globally, which can help Lebanon to improve its fiscal sustainability, promote equity and restore growth.

Mr. Boukather addressed the incompliance of the growing illegal private sector and its significant impact on Lebanon, noting that the private legal sector doesn’t constitute more than 30% of today’s economy. He further noted the importance of introducing the concepts of fairness (horizontally and vertically) while attracting investors; and ensuring competitiveness in the region, decentralising revenues, and urged to reduce the size of the public sector, as well as to tackle its poor management and excessive employment. The role of the public sector should be the regulator role, rather than being the management role. The public management of majority of state owned entreprises proved to be detremental for growth in the previous decades. The PPP legal framework existing since 2017 should be enacted along with all the other regulatory authority bodies. He also mentioned tax evasion, explaining how the private legal sector is being under attack by the illegal imports, under invoicing and fake companies being used. Finally, he considered essential to agree on what type and size of government Lebanon actually needs, and let the private legal sector lead the way, as the public sector management has proved to be incompetent and counter productive.

From his end, Mr. Daher addressed the importance of the tax compliance and the reforms that should reduce the size of the public sector. In the meantime, Quick mesures should be implemented such as 1) the enhancement of the digitalization in the tax filing and fix the current IT problems that prevent the taxpayers from filing and paying their taxes 2) merge the different tax departments (income tax, VAT, etc.) 3) activate the automatic exchange of information with tax administration of other countries through the CRS 4) set a onetime earmark tax to regularize past tax obligations in order to finance specific social safety net actions. All these mesures and others are also part of the propositions made by ALDIC and the RDCL.

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