Challenges in Implementing Taxation on Profits: Scrutinizing Lebanon's Budget Amid Financial Controversies

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Sources within the Ministry of Finance have cast doubt on the implementation of Article 80 of the 2023 budget, which imposes a 17% tax on profits generated by individuals from Sayrafa platform operations.

This article is originally published in, translated from Lebanese newspaper Nidaa al-Watan.

According to these sources speaking to "Nidaa al-Watan," the inclusion of this article in the budget was a move to address public concerns after widespread criticism of exorbitant profits made by some individuals on the platform halted by the acting governor of the Central Bank of Lebanon, Wassim Mansouri, following revelations of illicit enrichment at the expense of the central bank and the remaining reserves.

The sources raised questions about the Ministry of Finance's ability to gather complete information about a group of beneficiaries known to former governor Riad Salameh and his assistant Marianne el-Howayek, including Salim Khalil (notary public), Tarek Khalifa (IBL Bank), and other bankers like Marwan Khair al-Din. Additionally, those associated with the "Salameh Gang" within banking circles and currency exchange companies are under scrutiny.

A World Bank report last May highlighted profits of around $2.5 billion from Sayrafa, prompting Salameh to dismiss the report as "nonsensical."
The sources confirmed that Salameh and his associates are accused of profiting around $300 million from Sayrafa, with $120 million going to Salameh alone.

However, these claims remain unverified and can only be substantiated or refuted through accurate and independent investigations that the Central Bank of Lebanon and the Ministry of Finance can provide.

There are indications of the existence of two sets of books for the Sayrafa platform—one with transparent disclosures and another secretive, revealing potential beneficiaries like "Riad and his gang." The scrutiny and provision of complete information rest on the shoulders of acting governor Wassim Mansouri if he intends to assist the Ministry of Finance in implementing Article 80 of the 2023 budget.

Furthermore, questions arise about the difficulty of determining profits with precise figures and dates, especially during periods of intense speculation when exchange rates skyrocketed from around 20,000 Lebanese pounds to the dollar to 94,000. During those months, black market exchange rates significantly increased to form a difference of more than 20 to 30% compared to the Sayrafa rate. During those periods, most of the huge profits confirmed by the World Bank report were achieved.

The sources concluded by noting that Salameh aggressively printed Lebanese pounds to fuel the Sayrafa platform's operations, exchanging those pounds to buy dollar reserves supported by the central bank's price. In contrast, Mansouri has halted printing since August 1 to control the money supply and stop the depletion of dollars from the bank.