Tax cuts on the horizon

Parliament committee suggests axing VAT on two fuel oil types

The parliament’s Finance and Budget Committee has decided to submit a draft law for permanently scrubbing the ten percent value-added tax on the two fuel oil types, red and green diesel.
The decision would only come into effect if it is approved by Parliament.
According to the president of the committee MP Ibrahim Kanaan, crossing out the tax would cut around LL40 billion ($26.6 million) of the government’s annual revenues. This deficit, he said, would be substituted through funds from alternative sources.
The Cabinet last month submitted to Parliament a draft law to slash the ten percent VAT on red diesel, which is mainly used for heating. Meanwhile, a one-month subsidy of $2 per each 20 liters had been applied to the price of the commodity. The subsidy timed out on January 19.
Reports of corruption cases have 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.