The headquarters of the Constitutional Council in Hadath. (Credit: National News Agency)
The Constitutional Council decided Monday to suspend the application of Articles 36, 45, 72, 92 and 93 of the 2024 budget law, after the Lebanese Forces (LF) filed a challenge to invalidate these articles four days earlier with the council.
“The Constitutional Council deemed the grounds for the challenge sufficiently valid for it to examine the articles in depth before ruling on the merits,” tax lawyer Karim Daher told L’Orient-Le Jour.
12 MPs for Samir Geagea’s party called for the annulment of all of the budget law articles (95 articles) because it is “unconstitutional,” given that Parliament had not preceded it with a settlement law. Under Constitution Article 87, the settlement law involves closing the previous year's public accounts and shall be enacted before the passing of the next year’s budget law.
A similar challenge was lodged against the 2018 budget law on the same grounds but was rejected at the time. While insisting on the need to adopt a settlement law, the Constitutional Council validated the 2018 budget law, ruling that it was in the “public’s interest” given the context of the times.
'Budget riders'
The LF requested in the challenge they filed last Thursday the invalidation of the five above-mentioned articles because they constituted “budgetary riders,” i.e. they have no direct connection with the budget law. These are the articles that the council decided to suspend on Monday.
Article 36 which provides for an increase in municipal taxes based on a rise in the rental value assessment of built properties.
“Since municipal councils have their own finances, the amendments to be made to the procedures of determining and assessing municipal taxes must be regulated in a separate law, because they have no impact on the budget,” said Daher.
He said that these taxes have nothing to do with “the purpose of the budget law, which is to forecast and authorize expenditure and revenue for the coming year, and to find ways of balancing the accounts in case the expected revenues are not sufficient to cover the forecast expenditures.”
Article 45 provides for the imposition of a fine on those who breach the principle of free access to public beaches, by erecting barriers to obstruct passageways for instance.
Article 72 requires the payment of a fine in foreign currency in the event of false declarations or late payment of taxes payable in foreign currency.
Article 93 is also targeted by the challenge. It imposes a 17 percent tax on profits exceeding $15,000 when trading on BDL’s Sayrafa platform.
This is added to Article 94 which imposes a 10 percent tax on profits exceeding $10,000 made by companies that took advantage of subsidies.
“These taxes require special laws, and the motives behind them are independent of the budget. Also, Parliament must pass them after a special examination,” said Said Malek, a constitutional expert.
Another lawyer who declined to be named said articles 93 and 94 could also undermine the principles of non-retroactivity and annuality of tax laws.
The council has approximately one month to debate the suspended articles and make a final decision on whether to annul or validate them.
According to information obtained by L’Orient-Le Jour, Constitutional Council President Judge Tannous Mechleb has appointed a rapporteur who is due to submit his report to the council in 10 days. The council will meet within five days of the reports’ submission and will then have 15 days to deliver its decision.
In its constitutional review, the council can examine and rule on all of the budget law articles, not just the suspended articles and those explicitly mentioned in the challenge
This article was originally published in L'Orient-Le Jour. Translated by Joelle El Khoury.