Lebanon 2% VAT increase to 20% in 2012

5 October 2011

The 2012 Lebanese budget has included a provision for a 2% rise.  The new budget was presented this week by the Finance Minister in a bid to reduce rising state debt.  Over the past three years, the sovereign debt level has raised to over 135% - one of the highest levels in the world.

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The VAT rise, part of a package of changes and cuts, will reduce the annual deficit from 9.4% to 8.1%.  The 2011 budget remains unapproved, which has led to a significant delay in capital investment which has in turn exasperated the downturn and rising debt.

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