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”.