Industrialists say customs has already started to levy the additional three percent of duties foreseen in the budget, while the list of exempted products has not been published. (Credit: P.H.B.)
The Association of Lebanese Industrialists strongly criticized the customs administration Thursday for having begun to collect, as a precautionary measure, the customs duty of three percent that Article 71 of the 2022 State budget law imposes on imported products subject to VAT. The measure has been in effect since the budget was published Wednesday in the Official Gazette.
Article 71 also provides for the exemption of several imported products, including raw materials and equipment for local industry and agriculture. It also exempts imports for the security forces and the army, as well as gasoline.
The list of exempted raw materials and equipment is to be determined by a decree issued by Cabinet, upon the proposal of the ministers of finance, industry and agriculture.
According to association and its president Salim Zeenni, the customs administration has already begun to collect the three percent duty while the list of exempted products has not yet been published. Moreover, the government has resigned, which makes it difficult to convene Cabinet.
“The phone has not stopped ringing. Many companies have complained that the customs administration has collected the three percent duty as a precautionary measure, stating that it will refund the amounts claimed, if necessary, as soon as the list of exemptions is published,” said Zeenn. “This is unacceptable and we demand that the customs administration stop collecting this three percent.”
According to an industrialist who prefers to remain anonymous, the sum of this three percent in Lebanese lira is now calculated based on the obsolete official rate of LL1,507.5 to the dollar, which authorities plan to raise to LL15,000. While this rate is much lower than the market rate (the dollar has been trading at around LL40,000 for the past few days), its adoption, coupled with the planned increase in customs duties, could still cause the already dramatic rise in inflation rate (almost 1,400 percent in the three years crisis) to explode.
This story was originally published in French in L'Orient-Le-Jour, translated by Joelle Khoury.