BEIRUT — The Finance and Budget Committee resumed today its review of the 2022 draft budget, after meeting only once to consider it last week due to a full docket, including the capital control law and the parliamentary general assembly.
Here’s what we know:
• Ibrahim Kanaan, chair of the Finance and Budget Committee, said after the meeting that the budget should not be constructed using different exchange rates. “It is not acceptable that the citizens should pay taxes at [BDL’s] Sayrafa rate when they are being paid back at LL1,500,” he said.
• Kanaan said the committee asked the Finance Ministry to provide clear margins for the exchange rate that will be used in the calculation of revenues and expenditures, and until then the committee will suspend discussions around these specific articles.
• The lack of details about the exchange rates used in the estimation of revenues and expenditures sowed confusion and left the committee unclear on how the Finance Ministry was able to arrive at its projected numbers.
• It is often suggested that one of the reasons behind the central bank’s intervention in the currency market, stabilizing the lira at LL20,000 to the US dollar, was for the 2022 budget to reflect realistic numbers and for the Syarafa rate to become the reference rate.
• Kanaan also said the committee approved the article related to providing tax exemption on inheritance to the heirs of martyrs of the Aug. 4, 2020, explosion at the Port of Beirut.
• Finance Minister Youssef Khalil is representing the government at committee meetings related to the budget.
• The committee reached article 43 today, with 121 articles left to be discussed.
• The second meeting for the week is scheduled this coming Thursday, April 7.