The financial policy and the tax system are no longer in line with the economic and financial developments nor with the vision for Lebanon’s future.
The adopted financial policy has led to distortions in the Lebanese economy and to a significant increase in the public debt which has become a structural problem placing constraints on the state’s capabilities and limiting the Lebanese economy’s productivity and competitiveness.
The tax policy is unfair, given that indirect taxes represent the largest proportion of tax revenues, which lays the largest burden to the middle and lower classes, relative to their income. This is also the case because taxes are not levied on several types of income.
The current tax system serves the rentier economy and does not stimulate the productive economy which creates sustainable job opportunities.
Second - The principles:
Reforming the financial policy and addressing the public debt issue are two pressing national issues.
Building a sound financial policy on the basis of a fair tax system, an effective tax collection, a beneficial spending and proper management of the public debt is a fundamental pillar of economic growth and development and social stability. In this regard, the Lebanese National Bloc Party contributed to achieving tax justice by passing the law on the exemption of agricultural land from taxation and made another contribution by using tax to promote the productive economy through the law on the exemption of newly developed industries from tax.
The people that do not pay taxes do not consider the state to be at their service. Hence, they neither respect the state, nor public property and natural resources. Therefore, they neither monitor the state’s expenses nor hold it accountable.
Effective tax collection has two conditions, the first being fair, competent and effective management; and the second, a responsible, aware and supportive citizen.
State revenues must be spent on expenditures that serve sovereignty, social security networks, and investments in infrastructure and human capital to serve productivity and economic development.
Third - The vision:
Set a maximum limit for the debt-to-GDP ratio (not to exceed 90%), and set a maximum annual deficit of not more than 4%.
Draft a modern, simplified and comprehensive tax law that includes a charter under which the rights and obligations of the taxpayer and the administration are clarified and confirmed.
Adopt a fair tax system that spurs investment and innovation, but also a productive and sustainable economy with the aim of achieving social justice.
Adopt reforms aimed at achieving budget transparency. Additionally, banking secrecy should be in harmony with the applicable international principles.