Lebanese Private Sector Network Statement on the Recent Tax Increases

Written By Rima Ariss

The budget is not merely numbers on paper; it is meant to reflect the state’s vision and its ability to govern and manage the economy in order to achieve a minimum level of stability and growth.

The 2026 budget was adopted without a comprehensive economic or reform vision to address public spending or stimulate revenue collection within a sustainable framework, particularly in a fragile political and security environment and amid the expansion of a parallel economy at the expense of the formal economy.

The government’s decision, following the adoption of the budget, to raise the Value Added Tax (VAT) and increase fuel fees to finance public sector salary adjustments reflects a failure to address the structural excesses of the public sector. It also constitutes a hasty step taken in the absence of a clear financial vision and without considering its repercussions on citizens or its direct impact on the productive private sector, which continues to bear the greatest burden in sustaining the economy.

This oversimplified approach to a highly sensitive issue is expected to push inflation rates up by no less than 15% and further intensify pressure on households and law-abiding institutions, without addressing the structural imbalances in public finances.

Correcting the public sector’s situation is an urgent necessity. However, financing it through rapid consumption taxes instead of comprehensive reform undermines confidence, weakens growth, and shifts the cost of the absence of meaningful reform onto the formal private sector.

The Lebanese Private Sector Network affirms that no budget can serve as a tool for economic recovery in the absence of:

  • A clear political and reform vision

  • Effective public institutions

  • Control over the expanding parallel economy

  • A minimum level of stability

Accordingly, the Network calls for:

  • Restructuring the public sector

  • Improving the efficiency and performance of public institutions

  • Combating tax evasion and expanding the tax base instead of increasing taxes

In the absence of these reforms, the state will continue to increase spending through quick and hasty solutions, placing further strain on the formal private sector, which remains the sole driver of growth and the foundation of sustainable social stability.

Rima Ariss
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بيان شبكة القطاع الخاص اللبناني بشأن الزيادات الضريبية الأخيرة