Beirut: Government decisions to impose a LBP 300,000 levy on gasoline and raise VAT by 1 percent to finance six additional salaries for public sector and military personnel have sparked protests, amid warnings of rising prices and declining purchasing power.
According to National News Agency - Lebanon, Economy Minister Amer Bisat said there is broad national consensus on the need to raise public sector wages, particularly for the military, whose sacrifices far outweigh their pay. He noted the salary increases will cost the state $800 million, stressing that boosting spending without securing revenues would fuel inflation and pressure the Lebanese pound.
Bisat explained that the government initially sought to improve tax collection and combat evasion but found these measures inadequate, leading to the introduction of the fuel tax and VAT increase. He assured that price hikes would not be as severe as anticipated and pledged strict monitoring to prevent profiteering.
The ministry has intensified inspections, issuing fewer than 100 violations in 1,500 checks this year, and secured commitments from supermarkets and importers to maintain current prices. Bisat described the measures as morally necessary while affirming efforts to prevent unjustified inflation.