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Public finances: Why does the government avoid using its supposed budgetary ‘war chest’?

The public sector salary increases deepened concerns about the sustainability of monetary and fiscal policies, all under the IMF’s watchful eye.

Public finances: Why does the government avoid using its supposed budgetary ‘war chest’?

The general directorate of the Finance Ministry in Adlieh, Jan. 16, 2026. (Credit: Philippe Hage Boutros/L’Orient-Le Jour)

Announced on Feb. 16, the proposed tax measures to fund the promised salary hikes — especially excise duties on fuel and a VAT increase from 11 percent to 12 percent — immediately drew criticism from unions, lawmakers, and a public already struggling with the declining purchasing power.Questions resurfaced: Why press taxpayers further when the government reportedly holds “surpluses” at the central bank (BDL)?Why raise indirect taxes, which hit middle- and lower-income groups hardest, instead of implementing structural reforms targeting high incomes, corporate profits and capital? Legal motions Beirut Bar Association petitions State Council to challenge gasoline price hike The debate deserves careful scrutiny. According to the central bank’s monthly report, by mid-February, public sector accounts at the central bank held LL820,000...
Announced on Feb. 16, the proposed tax measures to fund the promised salary hikes — especially excise duties on fuel and a VAT increase from 11 percent to 12 percent — immediately drew criticism from unions, lawmakers, and a public already struggling with the declining purchasing power.Questions resurfaced: Why press taxpayers further when the government reportedly holds “surpluses” at the central bank (BDL)?Why raise indirect taxes, which hit middle- and lower-income groups hardest, instead of implementing structural reforms targeting high incomes, corporate profits and capital? Legal motions Beirut Bar Association petitions State Council to challenge gasoline price hike The debate deserves careful scrutiny. According to the central bank’s monthly report, by mid-February, public sector accounts at the central bank held...
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