Beirut - Arabstoday
The 2012 budget may not include new taxes or extra expenditures, Prime Minister Najib Mikati said Thursday. “We cannot under the current conditions enforce any misplaced tax as it will do harm to the economy [rather than] increase revenues,” he added, noting that Cabinet had reached a consensus on the issue in its session Wednesday. Mikati said this would allow the government to pass the budget quickly “and correct governmental financial issues.” He added that an amended version of the draft budget would be discussed next week. “We will also study the new salary scale and consider ways to provide the revenues needed to cover it without contributing to a further rise in inflation,” he said. Mikati’s statement followed a meeting held at the Grand Serail with Adnan Kassar, head of the Economic Committees, a group that represents the private sector. According to the National News Agency, the meeting was aimed at discussing an economic plan prepared by the prime minister. Mikati said the debt-to-GDP ratio had decreased in 2011 to its lowest level in several years. “The economic conditions are not as bad as what is being portrayed. The financial and fiscal indicators are good and in some cases better than last year,” he said, emphasizing the importance of stabilizing security conditions to shore up the Lebanese economy Kassar reiterated his call to insulate Lebanon’s economy from political scuffles. He said further deterioration in security could deepen economic woes. Joseph Torbey, head of the Lebanese Banks Association, said adopting the draft budget would be “suicide for the Lebanese economy.” He added that the government should increase revenues through stimulating economic growth and not additional taxation. Last May, the finance minister said the 2012 budget would include a new 15-percent tax on profits made through real estate transactions, a 5 percent increase on the banking profit tax and a 2 percent VAT hike.