No more VAT on diesel

Parliament scraps VAT on red and green diesel, puts off vote on transportation drafts till March 5

The Parliament Speaker, Nabih Berri, has postponed the legislative session until March 5, due to an insufficient number of members to vote after MPs loyal to the Future bloc and March 14 walked out of the session on Thursday (February 23). Thus the vote on two rival draft laws for transportation allowances was postponed until the next Parliament session.

The Parliament, however, did endorse a draft law that called for permanently scrapping the ten percent Value-Added Tax (VAT) on the two kinds of gas oil commonly referred to as red and green diesel.

The Cabinet in December submitted to Parliament a draft law to slash the VAT and applied a one-month subsidy of $2 per every 20 liters to the price of the commodity. The subsidy was originally intended to support residents of rural areas who use red diesel for heating their houses during the winter. However, reports of corruption cases emerged after citizens suffered a shortage in the subsidized commodity. Traders had reportedly bought the fuel at the reduced price and stored it until after the subsidy was halted to sell it at its market price.