Hariri’s resignation promises to undo the economic gains achieved this year. Anwar Amro /  AFP
Hariri’s resignation promises to undo the economic gains achieved this year. Anwar Amro / AFP

Lebanon's tax law suspension set to pressure on state finances



The Institute of International Finance (IIF) says Lebanon's politically motivated move to suspend a new tax law is a setback for much needed new forms of revenue for the government to fund wage and pension increases for civil servants.

"It is unfortunate that the Constitutional Council has suspended the new tax law, which included tax measures that could raise additional revenues to compensate for the agreed large increase in the public wages and pensions," said Garbis Iradian, chief economist at the IIF.

The IIF said that several parliamentarians looking to get re-elected in May 2018 believe their prospects are better without the tax law now and think that a crackdown on corruption and tax evasion will cover the public salary increases. Those hikes, which will kick in this month, are expected to add $1.2 billion, or 2.3 per cent of gross domestic product, to the wage bill, it said.

But that may be ambitious in a country with a big underground economy, widespread corruption and weak rule of law, says Mr. Iradian.

"Establishing an environment in which citizens are induced to comply with tax laws is difficult in Lebanon with a large informal sector, widespread corruption, an ineffective and uncertain legal system, and entrenched mistrust of government," he said.

"Experience from many developing and emerging economies suggests that reducing corruption and tax evasion significantly is a difficult and long process."

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The IIF said that enforcement of tax collection and a crackdown on corruption would not be enough to boost government coffers and that tax raising was also needed. The institute noted that tax capacity in Lebanon is estimated at 30 per cent of gross domestic product versus more than 60 per cent in Morocco and Tunisia and a global average of 70 per cent.

Meanwhile, tax revenue to GDP ratios in Lebanon are among the lowest in the Middle East. Those revenues fell by 3.2 percentage points of GDP from 2010 to 2016 after the government slashed gasoline excises by 50 per cent in May 2011, leading to a $350 million loss in revenue, or 0.8 per cent of GDP.  Tax revenues also dropped during that period due to a slowdown in economic growth, the IIF said.

Mr. Iradian pointed out that rescinding the fuel excise tax of 2011 would raise additional revenue of $500m, or 1 per cent of GDP, noting that in Turkey, where gasoline prices cost twice as much, tax revenue from the domestic consumption of fuel is equivalent to 2.1 per cent of GDP.

The burning issue

The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE. 

Read part four: an affection for classic cars lives on

Read part three: the age of the electric vehicle begins

Read part two: how climate change drove the race for an alternative 

Top 10 most polluted cities
  1. Bhiwadi, India
  2. Ghaziabad, India
  3. Hotan, China
  4. Delhi, India
  5. Jaunpur, India
  6. Faisalabad, Pakistan
  7. Noida, India
  8. Bahawalpur, Pakistan
  9. Peshawar, Pakistan
  10. Bagpat, India
How to protect yourself when air quality drops

Install an air filter in your home.

Close your windows and turn on the AC.

Shower or bath after being outside.

Wear a face mask.

Stay indoors when conditions are particularly poor.

If driving, turn your engine off when stationary.

COMPANY%20PROFILE
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Company%20Profile
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At Everton Appearances: 77; Goals: 17

At Manchester United Appearances: 559; Goals: 253

Porsche Taycan Turbo specs

Engine: Two permanent-magnet synchronous AC motors

Transmission: two-speed

Power: 671hp

Torque: 1050Nm

Range: 450km

Price: Dh601,800

On sale: now

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Farasan Boat: 128km Away from Anchorage

Director: Mowaffaq Alobaid 

Stars: Abdulaziz Almadhi, Mohammed Al Akkasi, Ali Al Suhaibani

Rating: 4/5

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COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
Five expert hiking tips
    Always check the weather forecast before setting off Make sure you have plenty of water Set off early to avoid sudden weather changes in the afternoon Wear appropriate clothing and footwear Take your litter home with you
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INDIA SQUADS

India squad for third Test against Sri Lanka
Virat Kohli (capt), Murali Vijay, Lokesh Rahul, Shikhar Dhawan, Cheteshwar Pujara, Ajinkya Rahane, Rohit Sharma, Wriddhiman Saha, Ravichandran Ashwin, Ravindra Jadeja, Kuldeep Yadav, Mohammed Shami, Umesh Yadav, Ishant Sharma, Vijay Shankar

India squad for ODI series against Sri Lanka
Rohit Sharma (capt), Shikhar Dhawan, Ajinkya Rahane, Shreyas Iyer, Manish Pandey, Kedar Jadhav, Dinesh Karthik, Mahendra Singh Dhoni, Hardik Pandya, Axar Patel, Kuldeep Yadav, Yuzvendra Chahal, Jasprit Bumrah, Bhuvneshwar Kumar, Siddarth Kaul

COMPANY PROFILE
Name: HyperSpace
 
Started: 2020
 
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
 
Based: Dubai, UAE
 
Sector: Entertainment 
 
Number of staff: 210 
 
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
'Panga'

Directed by Ashwiny Iyer Tiwari

Starring Kangana Ranaut, Richa Chadha, Jassie Gill, Yagya Bhasin, Neena Gupta

Rating: 3.5/5

Ziina users can donate to relief efforts in Beirut

Ziina users will be able to use the app to help relief efforts in Beirut, which has been left reeling after an August blast caused an estimated $15 billion in damage and left thousands homeless. Ziina has partnered with the United Nations High Commissioner for Refugees to raise money for the Lebanese capital, co-founder Faisal Toukan says. “As of October 1, the UNHCR has the first certified badge on Ziina and is automatically part of user's top friends' list during this campaign. Users can now donate any amount to the Beirut relief with two clicks. The money raised will go towards rebuilding houses for the families that were impacted by the explosion.”

RESULT

West Brom 2 Liverpool 2
West Brom: Livermore (79'), Rondón (88' ) 
Liverpool: Ings (4'), Salah (72') 

Youth YouTuber Programme

The programme will be presented over two weeks and will cover the following topics:

- Learning, scripting, storytelling and basic shots

- Master on-camera presence and advanced script writing

- Beating the algorithm and reaching your core audience

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RESULTS

5pm: Wathba Stallions Cup Maiden (PA) Dh 70,000 (Dirt) 1,600m
Winner: Samau Xmnsor, Abdul Aziz Al Balushi (jockey), Ibrahim Al Hadhrami (trainer)
5.30pm: Maiden (PA) Dh 70,000 (D) 1,600m
Winner: Ottoman, Szczepan Mazur, Abdallah Al Hammadi
6pm: Maiden (PA) Dh 70,000 (D) 1,800m
Winner: Sharkh, Patrick Cosgrave, Helal Al Alawi
6.30pm: Handicap (PA) Dh 85,000 (D) 1,800m
Winner: Yaraa, Fernando Jara, Majed Al Jahouri
7pm: Handicap (PA) Dh 70,000 (D) 2,000m
Winner: Maaly Al Reef, Bernardo Pinheiro, Abdallah Al Hammadi
7.30pm: Maiden (PA) Dh 70,000 (D) 1,000m
Winner: Jinjal, Fabrice Veron, Ahmed Al Shemaili
8pm: Handicap (PA) Dh 70,000 (D) 1,000m
Winner: Al Sail, Tadhg O’Shea, Ernst Oertel

The Limehouse Golem
Director: Juan Carlos Medina
Cast: Olivia Cooke, Bill Nighy, Douglas Booth
Three stars