The Directorate General of Finance building in Beirut. (Credit: Philippe Hage Boutros/ L'Orient-Le Jour)
The Ministry of Finance announced in a Thursday statement that it has finalized the 2024 draft budget and forwarded it to the Presidency of the Council of Ministers.
Among the numerous measures included in the 1,158-page document, one stands out that may cause concern: a one-point increase in the Value Added Tax (VAT), raising it to 12 percent starting on Jan. 1, 2024, if the text is adopted.
According to Article 20 of the draft budget, the VAT stays at 0 percent for exports and air and sea transport operations.
The Ministry also noted that it has sent the draft "within the legal deadlines provided by the Constitution," allowing more than a month and a half for the government to modify and approve the text before sending it to Parliament ahead of f its regular autumn session.
This session begins on the first Tuesday after October 15th of the year. If Parliament manages to adopt the 2024 budget within the specified timeframe — before the end of the year — it will be a first since at least 2005.
The 2023 budget has still not been approved more than eight months after it was supposed to be implemented, and it is now likely that the government will skip the 2023 budget entirely to focus on 2024.
Increased expenditures and revenues
L'Orient-Le Jour obtained a copy of the 2024 draft budget on Friday afternoon. Here are the key items in the text:
- Expected revenue amounts to nearly LL258.9 trillion. This represents just over USD $3 billion at Banque du Liban's Sayrafa exchange rate (LL85,500 to the dollar), and nearly $2.9 billion at the parallel market rate on Friday evening (LL89,400 to the dollar according to lirate.org).
- A little over 80 percent of the total revenue is expected to come from taxes.
- Projected public spending for the 2024 fiscal year totals more than LL300 trillion. This represents $3.5 billion at the Sayrafa rate and $3.4 billion at the parallel market rate, as of Friday evening.
- The expected deficit is therefore more than LL41.7 trillion, which is equivalent to $488.1 million dollars at the Sayrafa rate and $467.3 million at the parallel market rate.
- The expected deficit is equivalent to 13.8 percent of public spending. This ratio had been raised to 24 percent in the 2023 budget project which was approved by the cabinet.
