Reforming Lebanon’s VAT for Fairer Taxation

Lebanon’s tax system relies increasingly on indirect taxes, especially VAT, which makes up a very large and growing share of tax revenue.
This creates regressive effects: lower-income households are hit harder because they spend more of their income on consumption.
The current VAT exemptions are incomplete, and many essential goods still face tax while some non-essential items are taxed similarly.
The brief recommends short
to medium-term VAT reform: expand exemptions for essentials and introduce multiple VAT rates, with higher rates on luxury goods.
Clear classification rules, transparency, audits, and penalties are needed to prevent abuse and make the system fairer.

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.