Lebanon: Technical Assistance Report on Putting Tax Policy Back on Track

International Monetary Fund

No 2023/008, IMF Staff Country Reports from International Monetary Fund

Abstract: This Technical Assistance report identifies tax policy reform options to stop the drain on Lebanon’s tax revenue in the immediate and near terms and to move toward a more efficient, effective, and inclusive tax system in the medium term. Lebanon entered the economic crisis already with one of the world’s most skewed income and wealth distributions toward the affluent. Reversing the downward trend in tax revenue and improving the entire tax policy design are thus critical elements of the overall needed reforms for Lebanon to steer its way out of the crisis and modernize its economy. The analysis emphasizes the need for a holistic view of the tax system to guide reforms and balance the trade-offs, rather than a piecemeal approach with ad hoc uncoordinated measures—and for a strategic, sequenced approach to developing a rapid and powerful emergence from current difficulties. Excises are an efficient way to reduce pollution, generating marked environmental benefits and significant revenue, with a modest impact on prices. In line with international best practices, professionals should be taxed in the real profits’ regime and with the use of withholding taxes on payments to professionals for services.

Keywords: Tax Reform Crisis and Taxation VAT Efficiency Inequality; VAT revenue; VAT threshold; market rate; authorities of Lebanon; climate commitment; excise revenue; Value-added tax; Income tax systems; Income and capital gains taxes; Excises; Corporate income tax; Global (search for similar items in EconPapers)
Pages: 79
Date: 2023-01-13
New Economics Papers: this item is included in nep-acc, nep-ara, nep-pbe and nep-pub
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