The chairman of the Finance and Budget Parliamentary Committee, MP Ibrahim Kanaan, emphasized that implementing reforms in Lebanon's public finances requires addressing four key areas: the tax system, the budget, financial accounts, and public borrowing. He made these remarks during a conference on public finance reforms at the Ecole Supérieure des Affaires (ESA).
Kanaan explained that reforms should not be temporary but reflect a genuine commitment. He expressed hope that the new government is ready to engage in the reform process, assuring that Parliament will provide necessary legislative support.
The MP, who has served on the Finance Committee for 15 years, mentioned his various initiatives and propositions to reform the public sector and public finance management. He highlighted the need for comprehensive reform, considering political, economic, social, and administrative challenges. He also emphasized the central role of public finances in the functioning of the state and its institutions.
Mr Kanaan also stressed the importance of deeply reforming the Lebanese tax system. He proposed replacing the current system, which relies on indirect taxes, with a fairer system. Revising direct taxes, including a single income tax, would promote greater fairness, he noted. According to Kanaan, fiscal reform should go beyond minor adjustments in the annual budget and form part of a broader, ambitious vision for tax justice.
The MP considered that the budget must be inclusive, covering all state expenditures, including loans, subsidies, and funds managed by public institutions. He noted that the budget must adhere to the Constitution, focusing solely on approving revenue and expenditure forecasts, excluding unrelated legislative aspects.
Kanaan also stressed the importance of financial transparency, noting that compliance with constitutional norms, especially Article 87, is crucial for presenting financial accounts. He referred to gaps in handling past accounts, particularly the $27 billion discrepancy.
Regarding public borrowing, Kanaan emphasized that it should align with Article 88 of the Constitution. The text states the following: "No public loan or commitment that may encumber the Treasury may be contracted except by virtue of a law."
He criticized borrowing through treasury bills without genuine necessity, which contributed, according to him, to the rise in public debt. He also discussed short-term loans granted to administrations, a practice that has impacted Lebanon's financial stability.
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