Lebanons Tax Hikes Spark Anger Among Economically Frustrated Citizens

Prime Minister Nawaf Salam has announced increases in petrol prices and sales taxes. The government’s decision has sparked criticism from analysts who describe it as a “regressive” policy.

The price increase for 20 litres of petrol will be 300,000 Lebanese pounds ($3.35), while VAT rates will rise by one percentage point to 12 percent. The changes are expected to take effect immediately, pending parliamentary approval for the VAT increases.

Protests broke out on February 17 in response to the government’s announcement. A small group of taxi drivers blocked the Ring Bridge in downtown Beirut, while around 50 protesters gathered in Riad al-Solh Square later that evening. The protests were characterized by frustration with the tax increases, which many see as another burden for an already struggling population.

The last time a similar tax increase led to widespread protests was in 2019, when the government attempted to implement a series of taxes, including on WhatsApp calls. The response was significant, leading to the collapse of the previous government.

Prime Minister Salam defended the tax hike, stating that it is necessary to fund state employee salaries and pensions. He also promised to reform the tax system in the future. However, analysts have expressed concerns that the increases will disproportionately affect the most vulnerable members of society, widening the gap between rich and poor.

The Finance Minister, Yassine Jaber, stated that over 50 percent of the budget is allocated to salaries, and that the tax increase was necessary to secure funds. Not all government ministers agree with the decision, with some expressing concerns about the impact on the economy.

Source: Al Jazeera