A man maintaining a private generator in a neighborhood in Beirut. (Credit: Marc Fayad)
BEIRUT — The value-added tax (VAT) on private generator bills has been suspended, the Ministry of Economy and Trade announced Wednesday in response to complaints about the addition of the tax to last month's bill.
The tax may be canceled entirely, pending a decision from the Ministry of Finance.
"This is the first time that [generator owners] collected the VAT in addition to the monthly rate," the Ministry of Economy and Trade said in a statement Wednesday. "Since this matter falls under the jurisdiction of the Ministry of Finance, [caretaker] Minister of Economy and Trade Amin Salam has sent a note to the Ministry of Finance requesting its opinion on the legality of subjecting generator owners to VAT."
VAT is suspended, pending a response from the Ministry of Finance, the statement explained. At the same time, the Ministry of Economy and Trade reiterated the obligation of generator owners "to invoice and collect the amounts exclusively in Lebanese pounds.’’
Illegal but tolerated, given the inability of state-owned Electricité du Liban to ensure full distribution of power, private generator have been part of Lebanon's landscape for several decades. The situation increases monthly energy costs because the cost of electricity production is two, even three, times more expensive with private generators than through EDL's power plants.
In September, the Ministry of Energy and Water set the price per kilowatt-hour at LL 6,350, an increase of 18.5 percent compared to the previous month. Oil prices are on the rise globally while Lebanon's national currency has been depreciating against the dollar for over three years.