The Lebanese government has agreed to raise the tax on interest payments from 7% to 10% for 3 years under the draft 2019 budget.
Ali Hassan Khalil. The Lebanese Finance Minister described the tax increase as "essential" to reduce Lebanon's debt-strapped budget deficit.
Jamal Jarrah, the Minister of Information, said after the cabinet meeting that "the meeting was a bit long, but it was very productive in the subject of outstanding articles, most of which were approved, specifically raising the interest tax, on banks and individuals, from 7% to 10% for three years."
Jarrah added: "after this period (the three years), the tax returns to 7% and our financial and economic situation has improved, and if there is further improvement we can reduce it from 7% and perhaps to 5%."
The head of the Association of Banks in Lebanon recently warned that any increase in the tax on interest payments will affect the capital flows to Lebanon and weaken the ability of banks to play their financing role in the economy and impede the growth. It is worth mentioning that the interest income was exempted from taxes until the government introduced a 7% tax last year.
Source: (Al-Arabiya.net, Edited)
