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Lebanon: Technical Assistance Report on Putting Tax Policy Back on Track
Author:
International Monetary Fund. Fiscal Affairs Dept.
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Series:
IMF Staff Country Reports
Volume/Issue:
Volume 2023: Issue 008
Language:
English
Publication Date:
13 Jan 2023
DOI:
https://doi.org/10.5089/9798400230738.002
ISBN:
9798400230738
ISSN:
1934-7685
Pages:
79
Keywords:
Tax Reform Crisis and Taxation VAT Efficiency Inequality; VAT revenue; VAT threshold; market rate; authorities of Lebanon; climate commitment; excise revenue; Value-added tax; Income tax systems; Income and capital gains taxes; Excises; Corporate income tax; Global
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This Technical Assistance report identifies tax policy reform options to stop the drain on Lebanon’s tax revenue in the immediate and near terms and to move toward a more efficient, effective, and inclusive tax system in the medium term. Lebanon entered the economic crisis already with one of the world’s most skewed income and wealth distributions toward the affluent. Reversing the downward trend in tax revenue and improving the entire tax policy design are thus critical elements of the overall needed reforms for Lebanon to steer its way out of the crisis and modernize its economy. The analysis emphasizes the need for a holistic view of the tax system to guide reforms and balance the trade-offs, rather than a piecemeal approach with ad hoc uncoordinated measures—and for a strategic, sequenced approach to developing a rapid and powerful emergence from current difficulties. Excises are an efficient way to reduce pollution, generating marked environmental benefits and significant revenue, with a modest impact on prices. In line with international best practices, professionals should be taxed in the real profits’ regime and with the use of withholding taxes on payments to professionals for services.
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Cover IMF Staff Country Reports
IMF Staff Country Reports
ISSN:
1934-7685
Publisher:
International Monetary Fund