Is VAT in Lebanon a Progressive or Regressive Tax?

In Lebanon’s 2027 draft budget, revenues are projected to increase by 14.2% compared with the 2026 budget law. According to Lebanese Government’s Draft Budget 2027: Figures and Main Measures, VAT represents 52.3% of total revenues, equivalent to 60.1% of overall tax revenues. This highlights the importance and weight of VAT in Lebanon’s fiscal framework.
This raises a critical question: given the worsening living standards, is VAT — Lebanon’s largest source of government revenue — a fair tax, or is it a regressive one?
The paper proceeds by first outlining the main tax structures, then presenting Lebanon Opportunities’ (LO) findings on VAT distribution, before assessing whether VAT is progressive or regressive in Lebanon and finally examining reform proposals and their challenges.

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