A few days ago, the new customs dollar, calculated at a rate of 15,000 Lebanese pounds per dollar, officially came into effect, leading to a wave of price increases whose exact scope is still unclear. However, this wave will undoubtedly be the most severe for Lebanese consumers, whose purchasing power has eroded due to the collapse of the national currency.
Although the exact percentage of price increases has not yet been clearly defined, it is inevitable that they will worsen in the coming phase. The increases in prices will not be limited to luxury foreign goods and certain other food items, as claimed by the Ministers of Economy and Industry and the merchants and importers; rather, the increases will affect the prices of all goods in one way or another.
### Fees Affecting All Goods
Despite reassurances from ministers and traders that the new customs fees will not apply to all goods, and thus prices for a wide range of food and consumer products will not rise, these reassurances do not reflect reality. The new fees will impact all goods without exception, whether directly or indirectly. This conclusion is not hypothetical or a denial, but rather reflects the reality of the upcoming phase exposed by the contradictory statements of officials, who deliberately hide the truth that the authority has imposed a "fee" on all consumer goods without considering the living conditions that Lebanese people have endured for the past three years.
Three new fees must be detailed to verify the targeted categories of goods, and consequently the credibility of the Ministers of Economy and Industry, who insist that the fees will not affect the vast majority of food items.
The first fee is the new customs dollar calculated at a rate of 15,000 pounds per dollar. According to the Minister of Economy, this fee will only apply to "30 to 35 percent of imported food items," while 70 to 75 percent of them are exempt from the new customs fee. However, those exempt goods, although not yet specified, will also be affected by the Value Added Tax (VAT), which the minister himself did not deny. What does this mean?
It means that the items exempt from the customs dollar will inevitably be subject to the VAT of 11 percent, which will be calculated according to the new dollar exchange rate of 15,000 pounds. This alone provides sufficient reason to increase their prices substantially.
Moreover, the second fee is a 3 percent charge imposed on imported goods subject to VAT. This fee will affect the food items subject to VAT that are exempt from the customs dollar, namely those 70 percent of imported goods mentioned by the Minister of Economy. This is another factor that will significantly drive up the prices of all goods, including food.
### No Exception to Price Hikes
The third fee is a 10 percent charge imposed on imported goods for which local equivalents are manufactured in quantities sufficient for domestic consumption. This fee was implemented out of concern from the authorities to support Lebanese industry. However, the authority itself has not yet defined what those industries are or their production capacity. It is known that Lebanon imports at least 80 percent of its consumption needs and produces no more than 20 percent at best. Even the food products manufactured in Lebanon primarily rely on imported raw materials, meaning they too will be affected by the new customs dollar, potentially, along with other fees.
Additionally, industrialists have long complained about rising production costs, particularly regarding energy, justifying the increased prices of locally manufactured products, some of which even surpass the prices of imported goods.
In conclusion, all fees, along with the customs dollar, directly or indirectly affect the living standards of all segments of society, making no distinction between the poor or the affluent. Various food items of different types and sources will be negatively affected by the fees and taxes indicated in the 2022 budget, and this will manifest in the coming days as significant price increases. Moreover, consumption cannot be limited to food items alone; the wave of price increases will affect other consumer goods as well.
