Taxation without representation in Lebanon affects social structures

Demi Korban

News Editor


A crowd of researchers, professors, students, and tax specialists gathered in the IFI Auditorium on Tuesday, January 31, to discuss tax justice in Lebanon in relation to two new detailed papers on the topic.

The lecture was organized by the Issam Fares Institute for Public Policy and International Affairs in collaboration with the Asfari Institute for Civil Society and Citizenship, as well as the Arab NGO Network for Development.

IFI’s Research Director, Nasser Yassin, opened the lecture by introducing the two researchers who worked on the presented papers, Nabil Abdo and Farah Kobeissy.

Abdo’s paper explored “Tax Justice in the Lebanese System,” by answering a few questions in relation to the present tax system in the country.

“The tax system in Lebanon benefits the suppliers on behalf of the consumers,” said Abdo in light of the unstructured system.

Abdo explained that this system has been operating since the end of the civil war as a form of reconstructing the mishaps of the time.

He ensured that the current tax system is unfair to citizens because it transfers wealth from the poor to the rich and from labor to capital.

The political economy of taxation in Lebanon could be understood through two approaches, the economic and the administrative. The economic approach aims for a balance between equity and efficiency, whereas the administrative approach looks at how policy shapes or boosts efficiency and effectiveness of the tax system, as explained by Abdo.

He continued to describe the regressive income taxation, where higher paid individuals in society have a bigger advantage over the less paid individuals because of their ability to manipulate the loopholes in the system.

It is also important to note that both the bank sector and real estate sector are exempt from paying taxes.

Abdo concluded that, “The power structures should be changed in order to find a solution and reach tax justice.”

Following Abdo’s discussion about his research findings, researcher Kobeissy talked about her paper titled “Gender Justice in the Lebanese Tax System,” looking close into the relation between gender and tax paying.

She faced some difficulties, including the absence of any concrete gender analysis, as well as a general discussion of the topic.

Kobeissy pointed out the weak position of women in the economy, since only 27 percent of women participate in the workforce in comparison to 73 percent of men.

The tax system in Lebanon discriminates against women on the basis of social status through the focus on indirect taxes and the regressive taxation system, which are unfair to the poorer class and women.

Kobeissy called for more research on the topic, as well as diminishing discrimination against women in the direct tax systems.

Director of the Asfari Institute for Civil Society and Citizenship, Dina El Khawaga, Ph.D., commented that the country has been without a national budget for many years, so even if the tax reforms are implemented, there is still a lack of transparency since there is no clear agenda of how the money will be spent.

UN ESCWA’s First Economic Officer, Niranjan Saranji, Ph.D., also presented his critiques of both papers as being both timely and important at this particular time.

He suggested “to analyze the benefits and distortionary effects of tax and expenditure policies in any specific policy proposal.”

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