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On Wednesday, the Council of Ministers approved the draft budget for fiscal year 2023, as well as two other texts: a bill granting the government the right to legislate in the customs field and another for the opening of a supplementary credit line to the general budget for the year 2023 amounting to LBP 10 trillion.
Meeting under the chairmanship of caretaker Prime Minister Najib Mikati, the government adopted the draft budget law for fiscal year 2023, after a final adjustment of figures.
Sources close to the Ministry of Finance assured This is Beirut that “the text of the proposed Finance Law does not impose any new taxes, but readjusts certain fees, taxes and licenses which, in view of the devaluation of the Lebanese pound, have become so derisory that they no longer even cover the cost of the services provided.”
The same sources reported that “tax pressure has fallen from 16% before the crisis to around 4% in 2022.” It was also reported that the draft budget for 2024 was being prepared, and would be studied in parallel with the finalization of the Finance Bill for 2023.
Exceptional powers
As for the exceptional powers requested by the government in the approved bill, they are limited to the customs field and are granted to the Minister of Finance, “so that he can take quick decisions, without waiting for parliamentary meetings, when necessary and urgent,” according to sources from the Ministry of Finance. Other sources claim that this bill has been drawn up “so that the Ministry can collect customs duties in dollars, which would limit pressure on the Lebanese pound and provide dollars to the State, which badly needs them to finance certain expenditures, especially as the Banque du Liban (BDL) no longer seems willing to provide the State with greenbacks.”
As for the opening of an additional credit line of LBP 10,000 billion to the general budget for the year 2023, it is to be used to subsidize medicines for certain chronic diseases.
Tomorrow’s Cabinet meeting, on Thursday, August 17, will deal with supplementary budgets, including the project to be granted to the Ministry of Telecommunications.
Meanwhile, caretaker Minister of Finance Youssef Khalil announced in an interview with local channel MTV that the solution to the electricity crisis (to be able to pay for the fuel that keeps the power plants running) may come from bill collection or Special Drawing Rights (SDRs), since the BDL no longer seems willing to advance the required sums.
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