Update: Draft 2024 budget includes 4% increase in the standard VAT rate from 11% to 15%
Plans earlier this month to hike Lebanese VAT by 1% to 12% have been scrapped; the emergency rate hike will now be 4% to 15%. This rise will be spread over two years.
This must now be adopted by the Council of Ministers and approved by parliament.
Whilst the 2023 budget still remains unapproved, it’s expected that parliament will go straight to the 2024 budget in the Autumn sitting.
Lebanon has been in deep economic crisis for over four years. GDP has shrunk by over 40% in this period and inflation gone into triple digits. Lebanon is failed to meet economic reform targets agreed with the IMF, and therefore failed to qualify for $3 billion in bail out loans.
A hike to 15% was part of settling the latest round of funding from the IMF
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Exports and international transport services are still zero rated.
A ranges of supplies will remain exempted:
- Basic foodstuffs
- Transfer of real estate
- Newspapers and books
- Diesel oil
- Financial services