Lack of taxes, salary scale weaknesses in budget

The director-general of the Finance Ministry, Alain Bifani, said the main advantage of the 2012 draft budget is that it is the first of its kind in the past eight years. Bifani, who was giving a lecture about the state of the Treasury at the Press Club, said this budget lacked taxes and salary scales for government employees, adding that these points were among the bill’s weaknesses. “This budget represents the government’s program over the past year. The budget should have been comprehensive but this [goal] was not actually realized up until now. But there are attempts to make this bill more comprehensive,” Bifani said. He added that not too long ago the enormous electricity spending had not been noted in the state’s budget. “All spending, including allocations for electricity, should have been mentioned in the budgets in order to present all the closing accounts. But regrettably the closing of accounts were never presented over the past few years or had been hastily prepared,” Bifani explained. He said the government did not include the salary scale in the new budget, perhaps because its was under the impression that this issue would require more time to prepare. “The government has a feeling that it cannot continue spending without having legal constraints. The new budget did not include an earlier proposal to raise the value added tax by 2 percent, which was approved by the Paris III donor conference in 2006,” Bifani said. He added that the new bill, which has yet to be approved by Parliament, also did not include a proposal to raise the taxes on interest rates on customer deposits from 5 to 7 percent. “I can tell you from now there will be a heated debate in Parliament over the new bill on the grounds that, ‘how can you endorse the budget without a closing of accounts?’” he said. He underlined the need to complete all the auditing on the closing of accounts for all the previous years. Bifani added that total government revenues over the past three years have declined in comparison to the country’s GDP. He said most of the taxes in Lebanon have focused on consumer taxes such as VAT and taxes on cellphone calls. “The taxes on wealth are almost nonexistent,” the director-general said, alluding to taxes on capital gains and higher incomes. From DailyStar