Tax Evasion in Lebanon: How Much of a Burden?

Every national government sustains itself by raising money domestically, through taxes, and by borrowing from local parties or external lenders. As such, every population has its “potential to pay tax”, which in turn impacts the local authorities’ revenue collection target every year. Any remaining gap(s) in the national budget is usually financed through borrowing, whether from domestic creditors or from foreign private or public institutions. Foreign aid in the form of grants from some international institutions may also be granted to selective countries if their economies meet particular criteria.

To-date, there is no elaborate study nor sufficient data to conclude exactly how much tax revenues the Lebanese government is being deprived of every year. This can be attributed to imperfections in the tax networks and in the monitoring of all market players operating in the country’s various economic activities. Nonetheless, estimations can be made based on a number of domestic parameters and analyses of international benchmarks.

The report explores the following sections:

  1. Overview: Tax Evasion and Moral Hazard
  2. Income Taxes: Taxes on Income and Profits
  3. Property Tax
  4. Value Added Tax (VAT)
  5. Taxes on International Trade (Customs and Excises)
  6. Wrap Up: Lebanon’s Tax Evasion in Figures

This study attempts to identify potential gaps in tax administration in Lebanon, yet, it is important to note that no exact figures on tax evasion can be drawn mainly due to many hidden parameters and informal economic activities.

 

 

To read the full report, kindly click on the link below:

Tax Evasion in Lebanon How Much of a Burden

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