As the date for the budget implementation approaches, which is expected to include a clause to raise the customs tariff tenfold to secure revenues for the state treasury and pay increased salaries for public administrations without causing further inflation, discussions are circulating within governmental circles that the customs dollar will not change in the coming days. "Nidaa Al-Watan" learned from informed sources that, so far, no decision has been made to begin the implementation of the 15,000 Lira customs dollar upon the publication of the budget in the official gazette. The reason, according to a source familiar with the matter, is the lack of completion of the accompanying financial arrangements. Other concerned sources indicated that the delay is due to the "negative atmosphere prevailing in the country."
Given that the prevailing sentiment until yesterday was that the new customs dollar would take effect concurrently with the budget expected to be implemented in a few days, importers have warned about the need for clarity regarding the items that will be subject to customs duties. The Federation of Food Importers raised the issue of the "failure of the concerned state authorities to issue lists that include goods and food items added to those exempt from customs duties." They warned that this situation would create confusion in the food sector once the budget takes effect with all its provisions, including raising the customs dollar from 1,500 Lira to 15,000 Lira.
Hani Bakhshali, the head of the Federation of Food Importers, explained to "Nidaa Al-Watan" that increasing the customs tariff tenfold will raise the price of commodities. For example, the specified rate on imported salt is 10%, on cheese is 25% (depending on the type), and on canned goods and vegetables is 35%. If a can of mushrooms, which has a tariff rate of 35%, incurs another duty at the price of 15,000 Lira instead of 1,500 Lira, the tariff increase could lead to a price rise of about 40% based on an exchange rate of 37,500 Lira, increasing the can's price from 60,000 Lira to 70,000 Lira, which is already a high figure. He argued that "imported food products with a high customs tariff, which do not meet the market's needs or are not produced locally, should have their tariff rates reduced with the tenfold increase in 'customs.'"
He noted that "the caretaker Prime Minister promised that the private sector and the relevant ministries would be invited to hold a meeting to form a committee to address this issue, but this has not happened to date, hence our warning."
Regarding raw industrial materials, George Nasrawi, Vice President of the Lebanese Industrialists Association, confirmed to "Nidaa Al-Watan" that they are "exempt from customs" as they are used in local manufacturing, which protects local industry, but discussions are ongoing about reducing or exempting some duties on imported products.
The Ministry of Industry had prepared lists of products that would be exempt from customs duties, but it is currently working on studying the quantities, having counted 200 factories out of 6,000, to assess whether the quantities meet market needs. The 10% tariff on imports is applied to those without local equivalents, provided that local production meets market demand. For instance, 115,000 tons of various vegetable oils have been consumed while the production capacity is 240,000 tons, hence they will not be exempt from the 10% customs duty.
On another note, the Ministry of Industry proposed exempting national industries, machines, and equipment from value-added tax, but to date, the fate of this proposal remains unknown. As clarity regarding the customs dollar remains a pressing concern for Lebanese citizens, the question remains: if it is not implemented, how will the state increase its revenues and meet its obligations after increasing expenses due to salary hikes and transportation costs for public employees… will there be more currency printing?
