Government plan to tax seafront properties

The Cabinet gave its seal of approval Wednesday for long-awaited taxes on built-up properties along the Lebanese coast, a step which is expected to trigger protest by owners of resorts. Prime Minister Najib Mikati told reporters that the Cabinet had reviewed three proposals submitted by the Public Works and Transport Ministry and selected the one with the highest fees. “We selected the list which proposed the highest fees on every square meter along the coastline. We need these types of taxes to beef up revenues,” Mikati said. Economist Ghazi Wazneh hailed the Cabinet decision and said the step was long overdue. “This is very good news, but what is important is to enforce this decision and not heed the voices which will object to this tax,” Wazneh told The Daily Star. He added that some politicians had blocked earlier attempts to tax properties along the coast because these individuals had stakes in them. Taking advantage of the absence of a central authority during the Civil War, investors and warlords built most of the properties along the coast illegally. Successive governments, realizing they could not raze the illegal coastal resorts, instead slapped fees on every square meter in an attempt to restore some of the legitimate rights of the state. Sources said the state had no intention of asking the resorts’ owners to knock down the buildings as this measure would put it in direct confrontation with powerful political parties that provide protection for these investors. Some owners of resorts in Beirut pay a token fee of LL1 million ($666) per year to the state to lease millions of squares of meters of land. “These are very old contracts that were drafted when the price of land was very low. But since the prices of properties skyrocketed the state should revise these rates according to the current prices,” Wazneh said. He added that if these fee collected consistently, the treasury could collect at least $300 million a year from these properties. But Wazneh stressed that the government still needed to come up with taxes to beef up revenues to finance the recent salary hikes of public employees. The new decree does not require the Parliament’s approval, because the plan was officially ratified by the first government after the Taif Accord in 1992. It remains to be seen whether the owners of the sea resorts will comply with the new fees. From DailyStar